road test; Ford Fiesta LX

Five years ago Ford's Fiesta was a duffer; a triumph of slick marketing over indifferent design. The popularity of the early Mk 2 Fiestas, launched in 1989, was down to sales muscle and that-will-do engineering, not technical superiority. As small, inexpensive Fords, they were bound to sell well, and no rival has outsold them in more than a decade.

How different the latest Dagenham-built Fiesta, which sets class benchmarks for refinement and comfort, if not for space. Its new 1242cc engine, developed with the help of the Japanese motorcycle giant Yamaha, lives up to Ford's promise as the smoothest and quietest in its class. Not all Fiestas will get it, though. In an unusual (and confusing) three-tier arrangement, mid-range models get the new body but retain the old and inferior 1.3 motor, now called the Endura E. It costs less than the new Vetec SE engine, but is not so sweet or peppy. Pending the launch next year of its ultra- small city car, Ford will continue to make (in Spain) the old-shape Fiesta, known as the Fiesta Classic, to sustain its foothold at the bottom end of the market. But this, too, is denied the new engine.

There's no mistaking the chubby-cheeked newcomer, which is actually the old Fiesta in a smart new suit. Although the chassis and suspension have been extensively modified to improve crash safety, ride comfort, handling and noise suppression, they are basically evolutionary carry-overs. Not that you could tell from the all-new interior, which brings big-car attributes down to supermini level. The facia is particularly imposing - perhaps even a mite incongruous in its opulence at this lowly end of the market. Despite the test car's optional powered height/tilt adjuster that compromised the driving position, I found the Escort-style seats embracingly comfortable. The supple ride is a revelation, too.

The four trim/equipment packages - Encore, LX, Si and Ghia - cater for all tastes and pockets. Yet Ford seems unconcerned that the Fiesta, available with three doors or five, is less spacious than the Fiat Punto or VW Polo - two of its main rivals in a market sector that's doubled in size in the last two decades.

Small though it is, the new 16-valve, 1.25-litre engine gives sprightly performance - even more pep is promised from the alternative 90hp 1.4- litre engine, due next year - while economy, not zap, is the 1.8 diesel's forte. I was impressed with both transmissions, too: the five-speed manual has a crisp and easy gear change (the linkage and synchromesh have been improved), and the CTX automatic is very smooth; the getaway jerkiness that once marred it has been resolved. Because the engine is so quiet, you are spared the monotonous drone that afflicts most small cars - the new engine is barely audible when cruising, even though wind whoosh and tyre roar is muted. Cars of this size come no quieter.

With power steering, standard on some models, extra on others, the new Fiesta is light to drive and nimble with it. The options list also includes air conditioning, traction control, leather trim, and anti-lock brakes features expected on larger, more expensive cars but not on superminis. The driver's airbag is standard.

Specifications

Ford Fiesta LX, around pounds 8,900 Engine 1242cc, four cylinders, 16 valves, 74bhp at 52OOrpm. Transmission: five-speed manual gearbox, front-wheel drive. Top speed 106mph, 0-60mph in 11.9 seconds, average consumption 42.2mpg.

Rivals

Fiat Punto 75SX, pounds 7,874 Arguably the most stylish supermini, certainly one of the roomiest and best packaged. Keenly priced, very good value.

Rover 114 SLi, pounds 8,195 The old Metro under a new name. Nice engine and gearbox, cramped and dated body. Rides and handles well.

VW Polo 1.3CL, pounds 8,299 Stylish and well packaged, but 1.3 lacks pep and 1.6 costs more.