Mazda seems to have chosen the perfect time to replace one of the oldest and least inspiring models in its line-up. The Mazda2, a replacement for the Demio, comes when the company is frequently revising its sales targets upwards and reaching levels near its best ever total for the UK.

Sales for this car, and later the RX-8, will ensure that with the performance of the Mazda6 and revised MPV, the resurgent manufacturer will set a new sales record in 2003. Mazda admits its current level of growth in sales has been achieved without an effective supermini or B-segment car.

Sharing engines and transmissions with the latest Ford Fiesta (the entry-level 1.2-litre was used on the previous Fiesta) and built on the same production line in Valencia, Spain, the Mazda2 promises to be as fresh as the old Demio was stale.

Although the Mazda2 is expected to sell in double the numbers of the old Demio, that still leaves it with a modest total of 5,200 units in a full year, giving it a 1.8% share of the five-door B-segment.

Despite having opportunities to sell the car to fleets – perhaps taking advantage of downsizing trends at the lower end of the spectrum – the company has chosen to exclude daily rental and bodyshop cars in an attempt to ensure residual values are as high as possible.

Mazda marketing manager Rob Lindley said: 'Fleet sales represent 33% of B-segment so this is an opportunity for the Mazda2 perhaps to attract company car drivers downsizing to a car that offers space similar to a lower-medium car but with better benefit-in-kind tax efficiency.

'We also have specific strategies and programmes for sales to the public sector and for UK driving schools.'

Like the Mazda6, the Mazda2 adopts a similar labelling strategy for specification. Entry cars are badged S, rising to TS and TS2. The only 1.6-litre available will be the Sport model.

The entry-level 1.2 S, expected to account for 37% of annual sales, is priced at £8,760 on-the-road and will come with remote central locking and deadlocking, an alarm and immobiliser, twin front airbags body-colour bumpers and side mouldings, a radio/cassette player and steering wheel-mounted audio controls as standard.

Options include air conditioning, ABS with electronic brake force distribution, emergency braking assistance and side airbags. TS models have electric front windows, CD/radio and ABS as standard.

The 1.4-litre diesel is the same second-generation common rail engine as used in the Fiesta and various Peugeots and Citroens and is part of the diesel engine partnership between PSA Peugeot-Citroen and Ford. It is worth pointing out that Mazda originally trailed this car as being Euro IV compliant from launch (and therefore avoiding the 3% diesel supplement in benefit-in-kind tax), but has since been back-pedalling.

So in this case, like the Fiestas, Fusions, Peugeot 206s and 307s, Citroen C3s and Xsaras, the engine is Euro III compliant at launch and despite carbon dioxide emissions of 119g/km drivers will still face BIK tax based on 18% of the car's P11d value.

As is often the case, the strict emissions requirements of a low volume market such as the UK do not justify the extra global cost of developing Euro IV diesel three years before they are legally required. Cynics might suspect politics at play, too. The engine was effectively developed by PSA (Ford came on board a month before its completion), and it might raise a few eyebrows in Paris if the first Euro IV compliant car to be using it wears a Mazda badge.

Both the 1.4 TD and the 1.4-litre petrol engine will become available with a five-speed auto-shift manual (ASM), which offers the flexibility of a five-speed manual with the convenience of an automatic mode. These types of transmission are getting better to use all the time, and like rival systems at Vauxhall, Renault and Citroen, there will be no fuel consumption or emissions penalty over the standard manual transmission.

Behind the wheel

WHILE it might share a production line in Valencia with the Fiesta, the Mazda2 cannot be accused of looking like its Ford cousin. Features such as the headlamps, grille and roof rails echo the designs of the Mazda 323, Mazda6 and Premacy, while the bluff rear end and shallow rear light clusters have a hint of the old Alfa Romeo 145 about them.

Its proportions are more like the Ford Fusion than the Fiesta, but Mazda is promising better quality than both.

The interior is much brighter than the sober Fiesta too. The metallic-effect centre console (similar to that found on the Mazda6 upper-medium challenger) gives the Mazda2 a far more hi-tech feel than some of its rivals, and the instruments include conventional dials rather than the fussy dial/digital mix in the Ford.

The interior has plenty of room with far too many storage cubbies to recount here and is airy thanks to the large glass area. And the seats are more comfortable than your usual supermini fare.

While the 1.2-litre engine is no longer used in the Fiesta, it is a feisty motor, although its keenness to be revved does make engine noise intrusive at speed. The 1.4-litre petrol engine is a more refined unit and pulls well from low revs to ensure brisk performance.

I didn't get the opportunity to try the more powerful 1.6-litre for myself, but a spell as a passenger showed the 99bhp engine performs well. Meanwhile, the 1.4-litre turbodiesel is a gem – quiet when on the move and offering plenty of mid-range torque, seemingly capable of both nippy manoeuvres around town and relaxed motorway cruising.

There seems to have been a slight trade-off in ride quality to ensure body-roll is kept in check when pressing on though. The Mazda2 does make you feel the bumps more than most rivals, but is generally quite comfortable. The car turns in crisply, with sweet steering and neat behaviour. The gearchange is relaxed and easy and brakes stop the car well.

Driving verdict

MAZDA has produced a supermini which has a classier interior than most rivals and provides plenty of space and driving enjoyment. The Mazda2 is certain to play a part in making 2003 a record-breaking sales year for the company in the UK.

Mazda2 fact file fact file
Model	1.2	1.4	1.6	1.4TD
Engine (cc):	1,242	1,388	1,596	1,399
Power (bhp/rpm):	74/6,000	79/5,700	99/6,000	67/4,000
Torque (lb-ft/rpm):	81/4,000	91/3,500	108/4,000	118/2,000
Max speed (mph):	101	102	112	99
0-62mph (secs):	15.1	13.9	11.4	15.0
Fuel economy (mpg):	44.8	43.5	39.8	62.8
CO2 (g/km):	149	154	168	119
Fuel tank capacity (l/gal):	45/9.9
Transmission: 5-sp man,	optional5-sp auto-shift manual	(ASM) on 1.4 and 1.4 TD
Service intervals (miles): 12,500
On sale: March
Prices(OTR): £8,760-£11,995