Volvo XC40
Price £34,970
0-62mph 7.9 seconds
Top speed 130mph
MPG 56.5
CO2 127g/km

Officially, this is the best car made in Europe this year. At a glitzy ceremony in Geneva, which was more Eurovision than Oscars, Håkan Samuelsson, CEO of Volvo, stepped up to a spotlit stage to collect the trophy (a sort of ugly upside-down triangle) for the brand’s newest and smallest car – the XC40. The award is decided by 60 motoring journalists from 23 countries. It’s hard-fought and the results are closely guarded. But the fact Volvo came in so far ahead of the shortlist of six nominees didn’t surprise anyone. The XC40 has already scooped several awards and has the swagger of a vehicle born to win. What did surprise me is that in the 55 years of the European car awards, Volvo has never previously won. So, a big night all round for the Gothenburg gang.

It’s a year of firsts for them: the XC40 is also the only compact premium SUV Volvo has ever made. There is one crucial difference between the small premium SUV sector and the large premium SUV sector – size. To understand what’s involved imagine a big posh car, stuffed with luxury geegaws and advanced gadgetry, and then shrink the whole thing so it fits into a smaller space.

It’s one of the fastest-growing motoring segments (these cars are particularly popular in China, the world’s largest car market) and it is ferociously competitive. To have any chance of being the cream that floats, you have to out-premium the best of the rest. And that is exactly what Volvo has tried to do. The car is Swedish, alternative, urban, youthful and a bit left field. It sets dizzying standards in terms of design, connectivity, performance, luxury and safety. There are also endless tiny details that will surprise and delight: there’s a special space for phones with inductive charging, a foldout hook for small bags in the boot, a removable waste bin in the central console, hidden storage shelves under the front seats, the armrest lifts to create a space the exact size of a box of tissues…

Being a Volvo, safety is off-the-scale. For the risk-averse, this little car really is belt and braces. If you do manage to crash it, you’ve managed to do something heroically stupid – or have been exceptionally unlucky. It comes with a host features including Pilot Assist, City Safety, Run-off Road Protection, Cross Traffic Alert and the 360° camera to help with parking. Volvo has also discovered that spinal injuries are very common when a car crashes off the road into a ditch and have come up with a unique collapsing seat frame that disintegrates as you crash so as to protect your spine.

The XC40 also comes with a unique car-sharing feature. This means owners can pool their car with family and friends without having to hand over a physical key. Whether you get a key or a code, you’ll be firing up either a petrol or diesel four-cylinder two-litre turbo. A tidy, frugal three-cylinder petrol arrives later this year, while hybrid and fully electric XC40s are part of the longer-term plan. To my amazement, Volvo still expects 60% of sales to be diesel. I drove the petrol with an eight-speed auto and it was lively, willing and very composed. But nothing is ever quite perfect. In the XC40’s case it’s the horrid little gear shift. Not only does it sit oddly in your hand, but it isn’t intuitive. You have to nudge it the opposite way to what you expect and then you have to nudge it a second time. It irritated me every time I got into the car. A small matter, but things fly or fail on such little details…

Email Martin at martin.love@observer.co.uk or follow him on Twitter @MartinLove166