Matt Kimberly, PA motoring writer, says Kia has made huge strides with its new Rio supermini.

These days, no small car is just another small car. With B-segment cars like the Renault Clio and Ford Fiesta making up a quarter of all new car sales in the UK, if you're stepping into this particular fray there's a lot at stake.

Kia has released its new Rio to try and gain ground – and sales – against cars that have been best-sellers for generations.

Fortunately, comparing it to the outgoing model is like comparing fancy new running shoes to tired old plimsolls. The new Rio is genuinely stylish. Kia's family grille has been adapted, squeezing between 'devil horn' headlights, and the rest of the car is just as provocative. A dull runabout for people wearing slippers, this isn't.

A poke around any model of new Rio will turn up a number of well thought-out storage spaces including a surprisingly deep glove box, and a good-sized boot that's also very deep. It's deceptively spacious, and with a bit of stacking and shuffling you can squeeze a lot into it.

There are four engines and four trim levels. There are 1.25 and 1.4-litre petrol units, along with a super-economical 1.1 diesel and a less frugal but gutsier 1.4-litre diesel. The spec levels are 1, 1 Air, 2 and 3. The 1 Air was a bit of an afterthought but gives buyers the option of specifying air-conditioning without having to pay for full 2 spec.

The mid-range 2 is likely to be the best seller, and 75pc of B-segment cars are sold with petrol engines, making this 1.4 petrol 2 test car a good yardstick. On the outside there are standard 16in alloy wheels that sit comfortably in the arches, helping the Rio to avoid looking particularly under-wheeled.

Inside, air-conditioning joins a four-speaker stereo system, electric windows all round, electric folding door mirrors, two 12v power sockets, a USB input for MP3 players and steering wheel-mounted audio controls. It's a nice place to be and it's as stylish as the exterior, neither looking nor feeling 'budget'.

The smooth 1.4-litre engine is quiet and relaxed in town, with enough zest on a light throttle to keep up with traffic. Unfortunately, this model doesn't get Kia's EcoDynamics treatment, which includes Intelligent Stop & Go to cut the engine in traffic and save fuel, and low rolling-resistance tyres. Most diesel versions do though, and the lightweight Rio 1 with EcoDynamics will return 88.3mpg on the combined cycle while emitting just 85g/km of CO2. That makes it the lowest-CO2 non-electric car engine in the world.

As the pace picks up the petrol engine struggles a little. Also more noticeable at high speeds is the suspension thump over larger manhole covers and potholes, which on disintegrating roads can get irritating. On typical surfaces, though, the ride is fine for the sector. The seats are firm but comfortable.

The brakes are fantastic, plenty of power without being too grabby. The electric power steering offers variable resistance, adding weight as speeds pick up, and taking it away for parking. Slotting the Rio into a space is physically very easy, but visibility is restricted by a high dashboard, small rear screen and thick pillars. A three-door arrives next year, but that won't really help.

If you're a low-mileage driver, petrol makes most sense, because even the huge fuel economy of the basic diesel engine can't overcome the difference in initial purchase price. If you'd prefer to pay for a diesel, each will do at least 70mpg on the combined cycle to keep running costs low, and are tax-friendly, currently costing �20 or escaping excise charges altogether.

Although the jump from Rio 1 to 2 is �1,900, the increase from 2 to 3 is �700-800, and for that you get heated front seats, climate control and beautiful 17in alloy wheels, with more besides. The range-topping 1.4 CRDi diesel Rio 3 is �14,895, not cheap, but with Kia's seven-year warranty it's a car you could buy and keep with peace of mind.