The second-generation Volvo S40 (factory code MS / P1) premiered at the 2003 Frankfurt Motor Show. Built on the Ford C1 platform (designated Volvo P1) co-developed with Ford and Mazda, it featured a floating center console design and high torsional chassis rigidity. Manufactured as a 4-door sedan, it combined compact dimensions with premium safety features.

Engines ranged from 1.6, 1.8, and 2.0 four-cylinder units to 2.4 and 2.5-liter T5 five-cylinder engines producing up to 230 hp. Diesel options included 1.6D, 2.0D, and 2.4 D5 engines. T5 AWD and FlexiFuel models were also offered. A 2007 update refreshed front and rear fascias, lighting layout, and interior storage space.