The original first generation Fiat Panda was always a favourite of mine back in the Nineties and served me very well during my student days at Durham University. Often packed with up to seven friends in various stages of inebriation, it survived all manner of college high jinks until it was finally put out to pasture by an errant gritting lorry. It was therefore with some excitement that back in 2004, I heard about Fiat's plans for a replacement. I knew it couldn't match the 'back to basics' appeal of the Giugiaro styled original, but times have changed and so have the demands of modern motorists. Seats that resemble hammocks just won't cut it in a market of growing sophistication. The latest Panda may be linked to the original in name only, but it has proved to be an enduring favourite. The shape is cheeky without lapsing into cutesy pastiche and the equipment levels are far beyond the citycar norm. It's a car that's virtually impossible to dislike, especially since equipment levels were improved and the range was widened.

The term 'citycar' usually denotes a vehicle that's cramped, insubstantial and rather uncomfortable to drive. The Panda is a long way from this stereotype. Despite measuring only 3540mm from bumper to bumper, the Panda offers a decent amount of interior space, helped by a generous height of 1530mm and that wheel at each corner design. Room up front is fine for two big adults, but rear legroom will naturally be a little pinched if four burly blokes squeeze in. Still, for two adults and two children it works very well. Luggage space is adequate, access to the hatch being helped by a very low loading sill. A split folding rear bench helps when transporting long or bulky items. It's worth noting that despite the tall looks of the Panda, the sunroof option that can be fitted robs the car of a fair amount of headroom. A 6'3" colleague gave his head a good whack when getting in on the sunroof surround. The other thing to watch out for is that it's very easy to wedge the seat belt between the anchor and the seat, giving you the impression that you're belted in. The pedals are mounted quite high and as you depress them to the carpet, it's easy for a driver with small feet to slip off the bottom of the accelerator pedal.

Four engines are offered, opening with the entry-level 1.1-litre for those on a tight budget. Few will regret shelling out a few hundred pounds extra for the more powerful 60bhp 1.2-litre 8v unit which looks set to be the most popular engine option. The final petrol choice is a 1.4-litre and its 100bhp output is enough to give the Panda a decent turn of pace by citycar standards. Fitted to the appropriately titled 100HP model, it can reach 115mph and get from 0 to 60mph in 9.5s. Also bound to be much in demand is a 70bhp 1.3-litre Multijet diesel engine that returns quite astonishing fuel figures and there's a 4x4 version for the more adventurous of spirit. The diesel feels very smooth at idle, so you needn't worry about your neighbours slapping you with a noise abatement order on chilly mornings. On the road it feels lively and a good deal stronger than the petrol engines. In fact, it's easy to forget you're driving a diesel and reach for the green pump. Fortunately, pulling into fuel stations is an occurrence that doesn't happen too often with a car that can average 65mpg. That's just as well as the last long term car I last ran was a V8 Jaguar and the effects of succumbing to regular Peperami temptation meant that I was starting to pile on the pounds. So much for the Atkins diet.

Despite a flurry of new arrivals in the citycar sector, there's still nothing to match the Panda in terms of value for money. Considering the affordable pricing, Fiat have specified the car very well and crucially, it's fun to drive. Few cars are as instantly likeable.