Chevrolet has every reason to be positive about it new Aveo supermini, says Iain Dooley, PA senior motoring writer.

The subject of a recent and comprehensive overhaul, Chevrolet's Aveo is now even better equipped to challenge the more established players in the ultra competitive supermini market. It's a town car that knows its place, yet with the addition of diesel power it now has the legs to take long motorway journeys in its stride.

Chevrolet engineers have worked hard to improve the car's on-road manners and boost its overall refinement and ease of use. Many years have passed since the transition from Daewoo to Chevrolet, and the interiors of modern Chevrolets are significantly better these days. Furthermore, the past few years have seen a gradual and overall welcome shift for the better, and this latest generation Aveo is a good example of what's been achieved.

Chunky controls and solid-looking plastics dominate the Aveo's cabin. Up front the car's seats are supportive, while those in the back of this five-door hatchback are no less attractive and equally hard-wearing. Of similar importance is the general ambience, which is far removed from the dour, budget-spec environment of old.

What you get now is an uncluttered, easy-to-use fascia and controls, plus plenty of room for occupants. On the first point, the Aveo's various dials and controls are intuitive and located where you expect them to be. Everything works well and the mix of analogue and digital displays come together.

At the back there's a good-size boot offering a maximum 653 litres of space once you fold the rear seats to boost its carrying capacity. Overall, despite its size, the Aveo is a surprisingly practical machine. It easily fits the bill as a first car, but would also cope well as a stepping stone to something bigger.

An important addition to the Aveo's engine line-up is a 1.3-litre diesel motor boasting sub 100g/km CO2 credentials. While this makes sense if you need to dodge congestion charges, Chevrolet acknowledges that it's still petrol power that delivers the vast majority of sales and is a choice that will likely prove the more cost-effective for low-mileage motorists.

As such, the choice is between 1.2 and 1.4-litre motors producing 86 and 100bhp respectively. Unusually there's a six-speed automatic gearbox option for the 1.4, otherwise it's a manual five-speed all round.

In the real world the petrol engines offer more than enough performance – especially the 1.2. Both are impressively refined and, surprisingly, don't fall into the trap of some rival units by sounding thrashy and coarse when pushed hard. Unobtrusive at the best of times, the 1.2 punches above its weight away from urban areas and feels like it could easily cope with the occasional motorway journey. For added poke and a more relaxed motorway cruise the 1.4 engine is better but only just.

It's not just the Aveo's petrol engines that challenge misconceptions. On the road the compact Chevrolet is a refreshingly fun and polished car to drive. You normally expect such cars to do the A to B thing with little fuss and zero character, but the Aveo does it with enough enthusiasm to shame some of the more established opposition.

It's not a difficult to car to drive thanks to the ample assistance available from the steering and brakes, yet there's plenty of weight and feedback from the main controls to encourage occasional spirited driving. The ride is never choppy in town and feels stable and refined at higher speeds. Even twisty roads don't upset the Aveo, with the weighty steering and supple suspension making life easy and rewarding in equal measure.

As a rounded performer the Aveo is a sound and sensible proposition. There's no question that the competition at this level is tough, but the Aveo offers a good mix of refinement, driver enjoyment and space to make itself heard.

Factor in a good level of standard equipment – choice picks include air-con, cruise control, powered mirrors and front windows on the base model and alloy wheels, Bluetooth and comprehensive trip computer on the likely best-selling LT variant – and it's easy to understand Chevrolet's bullish mood and high hopes for its revamped supermini. And based on the car's performance, the good news is the company has every reason to be positive about its new baby.