Mazda's new Volkswagen Golf rival makes some class-beating first impressions, says Matt Kimberley of the Press Association.

Stretch your memory back a few years and think of the Mazda3. You'll probably remember it as a good-looking, humble compact family hatchback that, for reasons you can't quite put your finger on, you never considered a real match for the class leaders.

Prepare to update that opinion. The all-new Mazda3 is a quantum leap forward from the old one and it can take on the very best of its rivals on an equal footing – and maybe even steal the crown.

Let's start with the styling, which is unlike anything except the 3's Mazda siblings – the CX-5 and the latest 6. Its curvaceous and flowing lines are instantly recognisable and draw endless admiring glances unlike the latest straight-line-sober designs from Germany.

Then there's this car's engine. It's the sole diesel option for now – a 148bhp 2.2-litre unit. That makes it up to 600cc larger than the most popular diesels on sale today, but it coughs out 107g/km of CO2 – less than many 1.6s. The saloon version, called the Fastback, is at 104g/km. Downsizing isn't the right way forward, says Mazda. This is what it calls 'right-sizing'.

The achievement is astonishing. The SkyActiv-D twin-turbo diesel, despite its capacity, is so clean it passes Euro 6 emissions regulations without any need for additives. Even the likes of BMW and Mercedes haven't managed that yet. But at the same time it's still a good size engine with a lot of natural off-boost torque – something 1.6-litre diesels lack.

On the road it's one of the best diesels I've ever used. It accelerates cleanly from anything above 1,000rpm, is flexible enough to pull lower revs in higher gears so you don't need to work the gearbox, is quiet and, for a diesel, extremely smooth. The cleverly-harmonised turbochargers just get on with their work, reducing turbo lag and conjuring up a meaty lump of torque that eclipses more or less any of the Mazda's rivals.

The gearbox uses the same design as the one from the MX-5 roadster and it shows. It's not the lightest but it feels pleasantly mechanical. Combine this brilliant drivetrain with surprising handling balance, a compliant chassis, stiff body and well set-up suspension and you have a car that's among the best in class to drive, whether on a motorway or mountain pass.

It's also comfortable. Having previously driven the petrol version across 1,600 miles of abysmal Russian roads I can say that the ride is composed and settled, capable of absorbing almost anything that's thrown its way.

The interior is solid. Everything feels extremely well screwed together and there's a good spread of expensive-feeling materials. It's a distinctly Japanese cabin and the detailing is, to my eyes, very smart.

Mazda has made a point of including the MZD Connect infotainment system on mid-range trims and above. Connectivity is becoming more and more important, so the Mazda3 comes with two USB ports, a 3.5mm port, Bluetooth and an SD card slot, although the latter is occupied by the navigation system's maps data.

If there's a niggle with this otherwise extremely well-rounded and accomplished new car, it's the tiny front door pockets. Rounded and sized only for a bottle of fizzy soft drink, there's really nowhere to put anything like notepads or documents.

Rear legroom is ample, and shoulder room has been boosted for this new model. Although the C-pillars are broad, sitting in the back doesn't feel claustrophobic.

It's refreshing to find a car so outrageously capable but as efficient as – or more so than – anything else of its type. The old Mazda3 was a good car so this has hardly come out of the blue, but the new model really is first-class.