It's 20 years since Kia launched in the UK and the brand gets better and better, says Andy Russell.

The first Kia I drove when the brand launched in the UK 20 years ago was the Pride which had started life as a Mazda 121 so was an ageing model and its claim to fame was white-walled tyres.

Kia was an unknown quantity and this model summed the Korean car company up – cheap, cheerful and simply going from A to B with the help of second-hand technology.

The rather ironically-named Pride was Kia then and came to mind when I was driving Kia now and the all-new Picanto – its grown-up supermini that is miles better than the first-generation Picanto and light years ahead the Pride.

Kia has come a long way over the past 20 years, a lot further than just A to B with a range that has come on leaps and bounds in a relatively short time. Kia's profile was boosted enormously by the government scrappage scheme – the big sales winner with sister company Hyundai – some cracking deals and that industry-leading seven-year/100,000-mile warranty.

Kia has got an attractive all-round range, from superminis to people-carriers and 4x4s – still not the height of excitement but honest, good-value motoring – and there's more to come.

The original Picanto was a budget city car but the second generation has grown up – slightly bigger outside but much roomier inside, more powerful engines that give better performance but use less fuel and have lower emissions and more style and quality without a hefty price tag.

The new Picanto picks up the bold design cues from Kia's latest models so it's a good-looking hatchback, more purposeful compared to its pretty predecessor and this new five-door range has been joined by a sportier three-door line-up for the first time.

It's also pretty good to drive. At its heart are two new engines – the 68bhp 1.0-litre three-cylinder engine will be fine if you do a lot or city driving or short runs but if you plan longer jaunts and motorway work or regularly carry a full load of passengers the four-cylinder 84bhp 1.25-litre engine, offered with or without automatic engine stop/start system, is probably the best bet. The bigger engine can also be mated to an automatic gearbox.

I drove the greener 1.25 EcoDynamics version and that stop/start system cuts emissions to a road tax-dodging 100g/km and raises combined fuel economy to 65.7mpg and even in real-world driving I got 55mpg overall which explains why there is no diesel option.

It hasn't been economy at the expense of performance and the peppy Picanto has enough zip to keep up with traffic on the open road, picking up cleanly from low engine speeds, revving freely for overtaking and comfortable and capable at motorway speeds with four adults on board although, fully loaded, you have to keep the engine on the boil to get there but it's not a hardship with the slick five-speed manual gearbox.

The Picanto also feels grown-up to drive – the ride is generally supple and composed although a bit bouncy on poor roads, with some tyre and suspension pitter-patter when travelling light. Handling is safe and predictable with good grip and body control and a precise feel through corners – push it really, really hard though and there is some understeer but it is unlikely owners will push the Picanto to the limit.

Four large adults won't feel the pinch with decent head and legroom, provided front passengers aren't greedy, and five 'wide-bottomed' ones squeezed in for a short journey.

The boot is more city car than supermini-sized at 200 litres with the rear seats up but flip the 60/40 split rear seat cushions upright, fold the back rests flat and space trebles although they lay slightly proud of the boot floor.

Interior plastics are hard to the touch but nicely textured with silver trim highlights to give the cabin a lift and, given this is still a budget car, it feels well screwed together with no creaks or rattles. Large, no-nonsense dials are easy to take in at a glance and simple big buttons and rotary knobs are easy to find and use on the move. A big glovebox, large front doorbins and a huge cubbyhole in front of the gearlever, where you also have the auxiliary jackpoint, USB port and 12-volt charging socket, give good storage.

Five-door models come in 1, 2 and 3 trim levels, all well equipped. Entry 1 includes front, side and curtain airbags, stability control, anti-lock brakes, power steering, front electric windows, height-adjustable driver's seat and steering column and, on Air 1, air-conditioning. Picanto 2 adds Bluetooth connectivity with voice recognition, USB and auxiliary ports and steering wheel audio controls, electric, heated door mirrors, air-con, electric rear windows, 14in alloy wheels, front fog lights, alarm and upgraded trim while 3 has climate control, heated front seats, 15in alloys, body-colour side skirts and automatic headlights with LED daytime running lights.

With its new Picanto, Kia can cut it with the big guns and, in terms of equipment and warranty, beat them. If you are looking for a new, small car you can't afford not to look at the Picanto.