Volvo has announced that it plans to move into the entry-level hatchback market with a new car designed to compete with the Volkswagen Golf. Volvo says that the new car would be based on the C30 and will be part of the company’s shift away from sportiness and toward functionality.

The new Volvo hatchback will be based on the current C30.

The Volvo C30 currently competes with the Volkswagen GTI, so it makes sense that a new model with a less powerful engine and lower-end trim could compete with the base model Golf. The 2011 Volkswagen GTI has a starting price of $23,690 and the Volvo C30 starts at $24,100, so Volvo’s new entry-level hatchback should be priced very close to the Golf’s $17,620.

Volvo’s CEO Stefan Jacoby told Autocar.uk that the company would be focusing on “functionality and Scandinavian elegance,” and away from sportiness, according to Autoweek.

Volvo is also moving away from wagons, which have long been the trademark of the Swedish luxury brand. Volvo claims the luxury wagon segment has been declining over the last decade but it’s still sad to hear that the iconic Volvo station wagon will depart. Growing up going to private schools in New England, the parking lots were always full of Volvo station wagons driven by wealthy moms who wanted to avoid opulence at all costs. Sure, the move away from wagons and toward SUVs really only amounts to adding a few inches of ground clearance, but it still feels like a piece of my childhood will be discontinued along with the Volvo station wagon.