Kia is quite simply the most improved motor manufacturer on the planet.

Ten years it was a firm which built other company’s cast-offs. I’m thinking of the Pride, a re-hashed Mazda, which appealed only to the cost-conscious.

Fast forward a decade and the Kia fleet stands comparison with some of the biggest names in motoring, thanks to quality design, affordable prices and an enviable seven-year warranty. My vote in the Northern Group of Motoring Writers annual car of the year award helped Picanto and Sportage to first and second places. Hey, it’s not European Car of the Year, but a considerable achievement, nonetheless.

But Kia isn’t resting on its laurels. Here comes the Rio, a model which will cause furrowed brows at Renault, Ford and others. Picanto and Sportage are important, of course, but they are small fry compared to Rio, competing as it does against Fiesta, Clio and co.

This is the B segment which counts for 25 per cent of sales in the UK.

So, how does Rio stand up? Good, as you might expect. As ever with Kia models, it is an excellent all-rounder which doesn’t come out on top in any given area, but as an overall cost-effective package, it can’t be beaten. It looks sharp, thanks to the efforts of Peter Schreyer, the man who transformed Audi. He’s on a mission to achieve similar success with Kia in the mass-market arena.

Rio has a difficult job, however. Unlike Picantos, where price is everything, potential customers in the B segment are more demanding.

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.

It also has a good-sized boot that’s also deep. It’s deceptively spacious.

There are four engines and four trim levels to choose from. There are 1.25 and 1.4-litre petrol units, along with a super-economical 1.1 diesel and a less frugal but gutsy 1.4-litre diesel. The specification levels are called 1, 1 Air, 2 and 3. The 1 Air gives the option of specifying air conditioning without having to fork out for full 2 spec.

The mid-range 2 is likely to be the best seller, and 75 per cent 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, electric windows, electric door mirrors, two 12v sockets, a USB input for MP3 players and steering wheel-mounted audio controls. It’s a nice place to be.

The smooth 1.4-litre engine is quiet and relaxed in town, with enough zest to keep up with traffic. Unfortunately, this model doesn’t get Kia’s EcoDynamics treatment, which includes Stop & Go to cut the engine in traffic and save fuel, and low-rolling resistance tyres. Most of the diesel versions do though, and the lightweight Rio 1 with EcoDynamics will return 88.3mpg on a 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 may struggle a little, not having the outright power or torque to feel at ease above 40mph. Also more noticeable at high speeds is the suspension thump over larger manhole covers and potholes can get irritating.

On typical surfaces, though, the ride is fine. If you’re a low-mileage driver a petrol version makes most sense, because even the high fuel economy of the basic diesel can’t overcome the difference in initial purchase price. If you’d prefer to pay for a diesel, they are sublime.