Mercedes A200 CDI Avantgarde SE

Extending the range downwards provided the usual high standards of safety and reliability in a smaller package, and in the process grabbed a whole new generation of buyers. Seven years on, the A-Class has been reborn to compete with a wave of alternative hatches in what's now a competitive market.

The car is driven here for the first time in the UK, and from the outside the shape is unmistakably A-Class, thanks to the steeply raked bonnet and windscreen with short overhangs front and rear. The new version has more in common with larger Mercedes, with multi-lens headlamps, a bigger grille and a more conventional window line. This gives a grown-up appearance, adding to the car's upmarket feel.

But the good looks do not compromise practicality - the tall doors make exit and entry a breeze, while the deep hatchback provides a low loading lip for easy access. Once inside, the biggest improvement over the previous model is immediately obvious. The quality of the interior now matches the standards you'd expect from a premium maker.

The centre console is well laid out and clear, and smart, soft-touch plastics increase the sense of luxury. For the driver, simple instruments with an informative display in the centre are easy to use, with controls mounted on the steering wheel for safer operation.

There's more space in the cabin as well, thanks to the innovative sandwich floor design; this makes the A-Class practical and spacious, even though it's far shorter than a C-Class saloon. Specify the optional removable seats, and it can carry loads up to 2.75 metres long - much more than conventional rivals. The adjustable boot floor also provides useful extra storage, or a completely flat load bay for long or awkward loads.

Fire up the top-of-the-range 2.0-litre CDI engine and the sense of refinement continues. As well as offering strong torque from as little as 1,600rpm, the diesel unit is surprisingly keen to rev, without becoming harsh or excessively noisy. The six-speed gearbox requires deliberate shifts to operate smoothly, but the sensible spread of ratios makes the most of the powerplant's flexibility. Better still, the slippery aerodynamic shape will help this A-Class return nearly 50mpg.

Answering another criticism of the previous-generation car, Mercedes has worked hard to produce a strong combination of secure handling and ride comfort. After the 'elk-test' rollover of the original A-Class, stiffer suspension provided the necessary body control at the expense of a smooth ride.

With the new version, comfort is still a high priority, with most of Britain's road imperfections filtered out easily. Press on through a series of bends and the A-Class copes well. It can't disguise the combination of a short wheelbase and a tall body, but the car always feels secure and well balanced. Rivals may offer various takes on the traditional hatch, but the A-Class now combines innovation and quality to good effect. For some, the appeal of such a versatile car wearing a Merc badge will be hard to resist - even with a ΂£20,190 price tag.