The S40/V40 range was released in Australia in February 1997 and ran with no significant changes up until August 1997. [Note: I have seen cars made as early as August 1996 here so February 1997 is the date of introduction, not the date of manufacture
The S40 and V40 were both available from launch either in base or SE spec. The 2.0-litre normally-aspirated petrol engine was the only engine offered.
Models from September 1997 were updated with revised suspension (rear: revised springs and dampers, new trailing arm bushes, upper and lower links and lower control arm bushes; front: revised springs and dampers, new bushes and revised geometry), and bigger front brakes (281mm instead of 256mm) with stiffer calipers and pipes and a larger master cylinder.
The T4 became available from October 1997, initially as a manual only, but an automatic transmission became an option from January 1998.
In February 1998 the T model was released, with "low-pressure" turbocharged engine.
There were minor changes from January 1999. These cars can be identified by an ambient temperature gauge.
More significant changes came in July 1999, including a new entry-level 1.8-litre petrol engine - a more affordable model coinciding with Australia's upcoming goods and services tax. The normally-aspirated 2.0-litre engine was upgraded with lower friction internals, revised head design and variable valve timing – all shared with the new 1.8-litre engine. The suspension was also upgraded with extra compliance.
In March 2000 a limited edition Super Touring model was announced. Available as S40 or V40 T4 SE, these were available in a bright yellow colour with unique "Ares" 16-inch wheels. Other less attention-grabbing colour options of silver or black were available.
The facelifted "Phase 2" model was introduced in Australia in August 2000. These featured fresher styling including new headlights, taillights and flared front guards. The keys were to changed to a new folding type key.
At the same time, turbo engines were updated with the low friction upgrades and variable valve timing that the non-turbo engines received in 1999. The T4 engine increased in size from 1.9-litres to 2.0-litres.
The Suspension was further improved with a wider track and longer wheelbase. A five-speed automatic transmission was offered.
In April 2001 the 1.8-litre engine was dropped and the T4 discontinued. A manual transmission was now only offered on the base model, and was a special order on other models. [Note: This may be incorrect as I have seen a 2003 manual T4 here
August 2002 saw another update including a new egg-crate style grille, better airbags, improved fuel economy, smoother front suspension, more comfortable front seats, new three-spoke steering wheel and revised instrument design to match larger Volvo models.
In June 2003 Volvo introduced a limited edition AKTIV model which included A$7,000 worth of extra for $2,500 more. The extras were 15" "Vogon" alloy wheels, black-blend dual headlights, front fog lights, rear spoiler, leather upholstery and wood trim. The AKITV came in only Black Sapphire, Titanium or Silver.
The series then ran unchanged until May 2004 when it was replaced by the second generation S40/V50 built on the Ford C1 platform.