Surely, Volvo is over-compensating. After several years of playing down its performance credentials and even abolishing its R sub-brand, the newly divorced Swedish car maker is letting us drive a concept that seems designed to tick every box on the hot-hatch checklist.

Not that Volvo officially endorses this über-fied version of the C30, which made its debut at the recent Gothenburg motor show. It has been created by Polestar, a Swedish motorsports engineering company which is also responsible for the C30 racecar that is currently leading the Swedish Touring Car Championship – and which has clear ambitions to become Volvo's answer to BMW's M division.

But, after a day thrashing around Volvo's own Gothenburg test track, it's hard not to treat such official detachment as being little more than "plausible deniability." There's no doubting that a powerful faction within Volvo itself would love a chance to build something this mad.

And insane it is. The C30 Polestar's spec sheet is enough to put that of a Euro-rocket Focus RS to shame. The Volvo uses a tweaked version of the same 2.5-liter T5 engine that powers the Ford to deliver a claimed 399hp. with power channeled to all four wheels via Haldex clutch and a couple of clever diffs. It also gets race-spec suspension, a stiffened bodyshell, properly monstrous brakes and various aero tweaks.

Despite the "concept" tag, this is no sheltered show pony. Polestar claims the C30 has been engineered to near-production standards and I'm positively encouraged to drive it as hard as possible around the tight, cresty track.

First impressions are that it's as quick as the power output suggests, although the five-cylinder engine starts to feel a bit breathless when asked to rev. But there's no faulting the foolproof adhesion of the chassis – at least not on the track's smooth pavement, with massive grip and a near-perfect balance that makes it easy to ride the line between understeer and oversteer. It drives like a well-sorted Mitsubishi Evo – maybe even a junior Nissan GT-R.

There's little chance that Volvo is going to sign off on a production version of this C30 concept. The C30 is most of the way through its model cycle, and Polestar admits it would need to charge around £40,000 ($58,000) per car to make the project commercially viable.

But this C30 does prove that, inside Volvo and its most trusted suppliers, there's an ambition to return some of the performance credentials that won the brand respect. If Polestar does get the chance to become the equivalent of a BMW's M division for Volvo, then Volvo's future could be considerably more interesting.

Mike Duff/Autocar