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Introduced in the middle of the 2004 model year, the second generation S40 (known as the 2004.5 Volvo S40) introduced a new design based on the Volvo P1 platform built at the Volvo Cars factory in Ghent, Belgium. At the same time, the V40 was replaced by the V50 estate, also based on the P1 platform and built in Ghent. The S40 was nominated for the World Car of the Year award for 2005 and won the Canadian Car of the Year Best New Sport Compact award for 2005. It was also elected the South African Car of the Year for 2005 by the South African Guild of Motoring Journalists.
The chassis for this car and the majority of its components were developed by Volvo, however similar mechanical components can be found in the Mazda3 and the European Ford Focus. It had the latest generation of Volvo's modular 5 cylinder engines. These inline fives have been continually developed by Volvo since the debut of the engine in the 850, in 1993. The top of the line S40/V50 T5 AWD, as well as the 2.4 and 2.4i, powertrain is still made by Volvo.
The S40/V50 T5 (one of the several variants) features the 2.5L five-cylinder fuel-injected engine with a light-pressure turbocharger. The valvetrain has four valves per cylinder and is a DOHC design. The engine is transversely mounted at the front of the vehicle and was available with the M66W (front wheel drive) or M66C (all wheel drive) transmissions. In the US, the manual (6-speed) transmission was only available on the V50 in 2006, 2007 and 2010 and only with AWD and R-line trim.
Source: Wikipedia (original)