VOLVO has become the first car maker to produce a full range of hybrid models and the first soon to limit the top speed of all its cars in the interests of saving lives.

Its latest designs are at the top of the premium class, handsome and stylish, and they have helped towards healthy sales increases in both in this country and across the world at a time when many car makers are seeing falls.

The company has also taken the bold step of dropping diesel engines from its latest US-produced S60, aiming to concentrate on petrol/electric hybrid and full electric power in the future.

Against this back ground then, it might seem odd that I drive a diesel XC40 all wheel drive (AWD) to find out how the company's ‘baby' SUV stacks up against heavyweight competition like the Land Rover Discovery Sport, the Range Rover Evoque and Audi Q3.

Let me tell you - it matches them in every way, and feels more luxurious, with fantastic comfort helped by tan leather heated electric seats and much more.

And it has just pulled off the Tow Car of the Year award in the Caravan Club's annual contest.

Just sitting into the XC40's beautifully trimmed cabin is an occasion, and it adds so much enjoyment to every trip.

The quality of the ride is outstanding. It remains comfortable over all surfaces at slow and fast speeds, and Volvo has managed to keep the bump thump of large alloy wheels and low profile tyres to an absolute minimum.

This is often a problem with large SUVs, but it certainly isn't with this one - at least in the Inscription Pro model that I drove.

I even took is for some fairly easy off roading at one point - rough grass fields and farm tracks - and it also handled this with huge ease and great comfort.

On road, it smoothes out speed humps and rough surfaces in town beautifully, and manages the same unruffled progress at speed over the knobbly tarmac of some country roads.

For the time being, the D4 2.0-litre turbo diesel is probably the best bet for most people, although a petrol/electric hybrid has just been introduced.

With 187bhp of smooth and refined power under the bonnet, acceleration is excellent from any speed, albeit with a little delay sometimes as the standard eight-speed automatic gearbox catches up.

It's a smooth and economical cruiser on the motorway with plenty of power in reserve for overtaking and although there is a manual mode with paddles behind the steering wheel to make the changes, the auto handles everything so well, I hardly bothered with it.

My car was fitted with Volvo's Drive Mode Selection system, which has comfort, individual, dynamic and eco settings.

Comfort is the usual one for most driving and dynamic gives more urgency and higher gearchange points for pressing on.

Eco cuts torque to the engine in favour of better economy as you would expect, and individual can be configured to the driver's personal settings.

Having tried them, I found comfort to be by far the best and left it there.

Despite the suspension being set up for comfort - which I think most of us would rather have - it still takes the corners beautifully, with excellent grip and fair feel from the steering.

There is a small amount of roll when it's pressed hard, but this is well controlled by the well sorted chassis.

All this prowess helps to make it very safe of course, which is one of Volvo's raisons d'etre.

Other class leading safety devices include the City Safety Pack, which can detect vehicles, pedestrians and other obstacles in front of the car, alerting the driver and then automatically applying the brakes if a collision is likely.

It also has Oncoming Lane Mitigation that guides the car back into the right lane, Driver Alert Control to detect if the car is being driven erratically and warns the driver to take a break, and Run Off Road Mitigation and Protection, which first tries to stop the car going off the road, and if that becomes unavoidable, readies for impact by tightening the seatbelts and activating energy absorbing technology.

Standard kit is excellent, exceeding that in similarly priced competitors, with alarm, sat nav, alloy wheels, traction control and keyless entry and starting.