The backstory to this model pits Mercedes in a battle not only with rivals BMW and Audi but also against itself. In many respects, Mercedes rather shot itself in the foot in the nineties, squandering a vast welter of good will with quality that could at best be described as so-so. For a whole generation of drivers who grew up reassured that only cockroaches, Chuck Norris and Mercedes cars could survive a nuclear holocaust, this came as a bit of a shock.

The road to recovery hasn't been easy and BMW and Audi have made hay at the expense of the three-pointed star but the easy pickings are now officially over. The latest Mercedes C-Class is a riotous return to form and even this entry-level C180K model is undoubtedly made of the right stuff once again. Press the button, Mr President.

The trouble with building a whole lot of down-home quality into a car is that quality tends to weigh a lot. When you're dealing with the base petrol engine in the range, this usually equals a recipe that will have rice pudding skins and wet paper bags the length and breadth of the country resolutely unmolested. After all, 1796cc isn't a big capacity for an engine to move this vehicle, right? You'd think so but you'd be reckoning without the Kompressor supercharger that plumps power up to a very healthy 156bhp. This means that the C180K will zip off the line and through 60mph in an entirely respectable 9.2 seconds on the way to a top speed of 139mph.

"What's so encouraging about this car is that, in many respects, it has gone back to basics in offering what customers really want"

Not too shabby indeed. With that small engine in the nose, turn-in and handling are both extremely vivid. There's no doubt that the motorway ride of the latest C-Class is superb, refinement is excellent and steering response is also very good. Drive the car harder and it steps up to the plate at an acceptable level although the chassis is still a few degrees off the class best when really letting it all hang out. Mercedes play to a different script in this regard, opting for a more comfort-oriented set-up than rivals sporting roundels.

Prices start at around £23,000 and there are three trim levels offered in C180K guise with two very different themes. Go for the Classic or Elegance models and there's a very conservative look, with a traditional Mercedes grille and three-pointed star standing atop the bonnet. Specify the car in Sport trim and the car's front end becomes very different with an aggressive under-bumper assembly and the Mercedes badge incorporated into the grille in the style of the old SEC coupe. Viewed from the front, these two trim levels look like totally different cars. The exterior styling of both is neat with some very deft detailing such as the swage line that runs down the side and the cleverly integrated tail light clusters.

The C-Class is notably bigger than its predecessor, 55mm longer and 45mm wider, but in a welcome buck against current trends, the car has become lighter. Mercedes has also moved the engine down and back, improving the car's weight balance. The interior is supremely comfortable with decent storage space and it feels very well bolted together. Space inside is decent with more knee and shoulder room in the rear than before. There's even a respectable boot.

Old-school Mercedes-Benz enthusiasts will remember a time when equipment levels were Spartan to say the least. In the old days, you bought a Mercedes and thanked the dealer profusely if it came with a radio and rubber footwell mats. These days, things have progressed but it's still rather galling to buy Mercedes and then be expected to fork out extra for items such as parking sensors and satellite navigation which are fitted as standard to shopping hatches half the C180K's price. Of course, Mercedes will argue that this policy allows owners to specify the car exactly to their own individual tastes and that the money has been spent on the things that matter.

The C180K line up opens with the SE model, identifiable by its black grille detailing and rear boot handle strip. Then there's the luxury-oriented Elegance and the dynamic Sport. The Elegance features black dials and eucalyptus wood inserts as standard and the Sport features aluminium trim elements that rather cheapen the look of the otherwise excellent fascia. A multifunction steering wheel, ESP stability control and a multitude of airbags are standard on both models.

Debadge your C180K and very few people would think it cost you a penny under £30,000. Couple that with very reasonable ongoing running costs and it becomes clear why sales of compact executive models with prestige badges have been eating into what was once the heartland of cars like the Vauxhall Omega and the Ford Scorpio. You certainly won't go skint at the pumps. A combined fuel economy figure of 36.2mpg is the best in the C-Class line up for a petrol engine, with only the oil burners getting better fuel figures.

The key to keeping residual values in check is to not go berserk with the options but with so many almost must-have features reserved for the options list, this is tricky, and published three-year residual figures for the C180K must, therefore, be taken with a rather large pinch of salt. Mercedes has worked hard to reduce minor crash costs, with four independently acting impact levels. The company even offers a service where your C-Class can be returned to Mercedes at the end of its life for environmentally-friendly disposal. I can't see that telephone number attracting too many calls though.

The Mercedes C-Class is a big improvement on its predecessor. What's so encouraging about this car is that, in many respects, it has gone back to basics in offering what customers really want. The target buyer would much rather drive a car that feels several notches removed from its direct competition in terms of improved quality than sit in a car that feels as if it's had the contents of a Comet liquidation sale levered into it. Gadgets do not make a premium car.

The C180K is the acid test of this philosophy. It's easy to build-in plenty of quality when you're charging nearly £40,000 for it, a price some of the upper specification C-Class models will command. Virtually halve that figure and the task becomes a lot trickier. It's good to see the engineers haven't skimped. While the fat profits will be made on cars like the C350 and C320CDI, buyers of the C180K aren't going to contribute enormously to Daimler Chrysler's bottom line. If you can cope with the guilt, you should be set fair.