Volvo has added a new three-cylinder petrol engine to its XC40, marking the first time such a unit has ever been produced by the Swedish company in its 91-year history.

The 1.5-litre engine – badged T3 – has been produced using the same modular design as that found in the company’s four-cylinder units, and sends 154bhp to the front wheels via a six-speed manual gearbox – though an eight-speed automatic transmission is expected to follow shortly after.

It bolsters the XC40’s engine line-up, which currently consists of one diesel and one petrol option. This latest addition has been optimised for hybrid compatibility, with both a hybrid and pure electric version due to arrive in the next few years.

Alexander Petrofski, senior director of cluster 40 at Volvo Cars, said: “Our new three-cylinder engine is an exciting development for the XC40 and for Volvo Cars in general.

“This compact engine design provides the flexibility we need as we introduce more powertrain options for XC40 customers.”

A 143bhp diesel engine has also been added to the line-up, giving buyers more powertrain options than before.

Up until now UK buyers have only been able to opt for the top-spec First Edition model. However now, thanks to the inclusion of entry-level Momentum and sportier R-Design trim lines, there’s a larger variety of specifications to pick between. A top-end Inscription model has also been added.

The new XC40 is the smallest SUV in the firm's line-up
(Volvo)

A new exterior styling pack is also available, adding brushed stainless steel skid plates, lower door trim moulding and integrated dual tailpipes to the compact SUV’s exterior. Currently the smallest SUV in the Swedish manufacturer’s line-up, the XC40 sits beneath the XC60 and XC90 models.

The XC40 T3 will cost from £27,905, with higher-spec Inscription models starting from £30,405. Deliveries are expected to commence this summer.