My first company car, going all the way back to 1983, was to my great surprise and delight a Ford Fiesta XR2. Despite the automatic choke, which was a nightmare in winter, I loved it. I was looking forward, therefore, to testing Ford's latest Fiesta with its larger body. After all, interior space is something that this car has always struggled with down the years. At last, this latest version puts that right. I'm a great fan of hatchbacks and as small cars go, the Fiesta offers everything I would look for in a smart 'town and country' car that enables you to combine business and family needs pretty well. The Fiesta has consistently been in the top three best sellers for years. The latest range, updated to keep it near the top of the supermini class, will surely stay there.

A compact car makes eminent sense for your budget, but can be less than practical if you have a lot of fetching and carrying of children or shopping to do. The Fiesta now has a surprising amount of interior capacity, so offers a satisfying compromise. In fact it's 87mm longer, 50mm wider and 100mm taller in five-door guise. That of course means it's not as easy to park or as simple to thread through city streets as the old car - though a glassy bodyshell should mask this to some extent. Whether it's better looking will be also up for debate. The driving position is perfect, everything clear to read and operate. I found it very comfortable, too. And Ford definitely have an eye for smart but practical upholstery, which is a prime consideration if, like many of us, you alternate between driving clients and kids.

Ford have very cleverly acknowledged with their 'baby' that today's owners who've decided to downsize for the sake of economy, don't want to be reminded of that fact every time they get in. Performance, ride, handling and refinement must all be of unquestionable quality. Get behind the wheel of one of the zippy 1.4 or 1.6-litre engined variants, as I did, and you'll agree, however, that this is a very different car to Fiestas of a few years ago. The performance and fuel economy figures are good, certainly - but that isn't what counts. This Fiesta is every bit as much fun as my 1.6 XR2 was in those halcyon days of my youth. Put your foot down and it's hard to credit that there's not a more powerful engine under the bonnet. The engines sound quite good too, and the drive quality is top notch.

The short answer is 'yes'. For small car buyers, the latest Fiesta still represents a big step forward.