Road Test: Fiat Panda 0.9 TwinAir [85] Lounge 5dr

The panda, the four-legged furry creature, is famously resistant to multiplication. Much to the despair of matchmaking zookeepers everywhere, a female panda, even in the presence of the most eligible mate, seldom allows herself to be diverted from munching bamboo shoots to getting her freak on. By contrast, the Panda, the wheeled one, has been fecund: petrol, diesel, 100HP, 4x4, Cross, all the rest. Most small cars come in a restricted range, but the reason there are so many different Pandas is that there are so many different Panda users.

Lots of its rivals are girls' cars or old-folks' cars. The Panda is both of those and much more. This has been Fiat's triumph, really. The Panda can be a philosophically minimalist car for the prosperous metropolitan (our friend James), or, in different spec, can be the rugged tool of a mountaintop farmer. It can be the sole car for a rural family or an urban youngster, or the second car for empty-nesters.

That piled up the pressure on the designers and engineers working on today's new one. It had to accept a wide range of engines and equipment. It had to be economical but able to tackle long journeys with a load up, light but decently spacious, cheap but safe, fun but serious. In a nutshell, small but big.

I remember the morning in the Top Gear office when we first saw the pictures. There was a collective sigh of disappointment. If you agree, I urge you to wait until you've seen it, because now I have, I rather like it. And I speak as one who has a strong sentimental attachment to the previous one, having driven several examples for thousands of miles in many countries. The new one loses some of the chiselled visual discipline of the old one, but the barrel sides, strong wheelarches and bigger face give it extra strength.

The interior is night-and-day better than the old one. The blocky cliff of a fascia is gone, replaced by an edifice that uses a nice range of textures and graphics. The cloth on the test car's doors and dash is a bit beige, but other colours can be had. It's full of useful storage and it's also decently built - as well as a VW Up, actually. It's made of proper materials, and it's the first Fiat I've driven that doesn't have cracks between the dash moulding where you can wedge the power cable for your satnav.

So it dangles untidily, unless you specify the very neat, optional semi-integrated TomTom. That's just one of a new range of equipment that fits the Panda to do the jobs you'd previously have left to a bigger, more expensive car. You can also have a forward-sensing collision-mitigation device that'll apply the brakes if you're distracted and neglect to. The VW Up (and its Skoda and Seat cousins) has both those, but no other baby cars. You can also get parking sensors, a sliding rear seat and a decent range of entertainment options.

Which would all be pointless if the basic car underneath didn't have the sophistication to wear it. Slightly ominously, there haven't been sweeping engineering changes. But experience the car, and it turns out that what has been done is judicious and sufficient. At the front, there are new fabricated arms for the suspension, and the anti-roll bar is mounted to the dampers for better control. The suspension sits on a new subframe that also acts as an extra structure to absorb crash energy, making the thing safer (though it's denied a five-star NCAP score, largely because ESP is only optional). At the back, the suspension has had a detail redesign, and above it is a body stretched by 11cm to receive a bigger boot and a bit more back-seat space. Then there's the option of the excellent 85bhp TwinAir two-cylinder variable-valve turbo engine.

That's the one I'm driving. It's a fascinating engine, but it asks you to be fully engaged before it does its best work. Rev high, and it'll propel the little car with remarkable vim, giving it real overtaking ability, even at motorway speed. But go like that, using the revs, and the consumption is nothing special. To get it to be thrifty, you have to pay attention to shifting up at what seems like absurdly low revs, and relying on its chugga-chugga two-cylinder torque.

In a 500, the TwinAir is a £1,400 option over the 1.2-litre four-cylinder. Maybe in a car like the 500, which you buy for love, that's justifiable. But if the upgrade cost is the same in the Panda, which you buy for sense, I'm not sure that £1,400 is tenable. It's too big a portion of the overall price of the car, unless you really are going to use your Panda for long journeys at speed. And, anyway, the 69bhp 1.2 is a lovely engine. It's easy and understandable to use, and pulls sweetly all the way to the red line. It might not have much to give, but it willingly gives it.

Either version rides and handles nicely. The Panda feels a little more eager in corners than the Up, but the Up's ride refinement is better. But both of them have a suppleness and quietness in their suspensions that step way above the baby-car norm. The Panda's excellent new seats help here, too. Again, good for long trips. And back in town when you're driving or parking, its high driving position and excellent visibility and squared-off sides all urge you into taking cheeky advantage of every spare millimetre. Or, if you're in Italy, of conjuring those millimetres out of your imagination.

For the UK launch, there will be four engines, including a diesel and a non-turbo TwinAir, in three trim levels. Then comes a 4x4 and likely a hotter one. The Panda breeding programme continues.