Renault is part-way through a fairly significant transformation to re-invent itself as an upmarket brand with an electrified line-up.

The Megane E-Tech marked the first step on this journey and it fit the bill perfectly. The Austral is the next and it will replace the Kadjar as the brand’s core SUV.

This means competing against industry heavyweights like the Nissan Qashqai and Kia Sportage.

Unlike the Megane, the Austral – or AUSTRALE as the badge suggests - isn’t wading into battle with a fully electric powertrain though. Instead, it’s debuting a new hybrid system.

Thankfully Renault shelved its existing hybrid engine, which is currently found in the Clio, Captur and Arkana and would certainly not give the Austral a fighting chance against its peers. The new system uses a 1.2-litre turbocharged petrol engine, two electric motors and a small, 2kWh battery.

It’s a lot more potent, with 200PS on tap, and promises impressive efficiency. Official figures suggest 60mpg and its CO2 emissions of 105g/km are vastly lower than all its rivals, which makes the Austral an attractive fleet proposition.

The complicated clutchless gearbox from Renault’s other hybrid models has been carried over, albeit updated. It manages the power output of the engine and motors through a selection of 15 possible combinations.

From the off, the Austral runs silently on electric power. With a careful right foot it’s possible to stay in EV mode for up to 80% of the time in a city. The battery won’t power the car for very long before the petrol engine fires up to charge it, though.

At lower speeds and light loads the motor powers the front wheels. If you call for more power the petrol engine works with the motor to give greater acceleration. At higher cruising speeds, just the engine provides momentum.

As a driver there’s no real complexity to the Austral’s powertrain, you just stick it in Drive and go. It works best, unsurprisingly, when the electric motor is doing the work. Once the petrol engine is brought into the mix the power delivery becomes a little disjointed. It’s fine when you’re just cruising along, but any sudden call for power results in a hesitation as the gearbox tries to work out how best to deliver it.

Refinement levels remain high, however. Compared to the Kadjar, the Austral represents a significant step forward for Renault in this segment. The powertrain is hushed, there’s little wind noise and the car feels weightier and more luxurious than its predecessor.

When driving around town the Austral is surprisingly efficient when compared to regular petrol SUVs, showing up to 60mpg. The fuel consumption remains impressive at higher speeds, with motorway trips returning 46mpg. During our time with the car, over mixed routes, we averaged almost 50mpg.

One of the headline features of the Austral is its four-wheel steering system. It’s only fitted to top-spec Iconic Esprit Alpine models, but shortens the turning circle, makes manoeuvring easier and perks up the handling.

Combined with the light and quick steering, the Austral feels remarkably agile, almost unnervingly so. It’s clear Renault has favoured handling over comfort when setting up the suspension, so while the firmer ride mitigates body roll, it does crash over bumps more than we’d like. Lower grade Austral’s have a slightly different setup, so we’d a expect a softer and less engaging experience in those.

The Austral’s exterior styling is muscular but understated. It’s not as daring as the Megane and has more in common with the now defunct Koleos.

On the inside, things are a lot better. The Austral’s interior is probably its best attribute. The wraparound dash incorporates a 12-inch portrait touchscreen and a digital instrument cluster display which both provide excellent graphics and are powered by Renault’s Google-based OpenR operating system.

In the centre console there’s a giant handle that is used to slide the storage box lid open and also serves as somewhere to rest your hand when driving. The gear selector is found to the right of the steering wheel, above the wiper stalk, and yes, it’s as easy to mix the two up as it sounds.

Our test car’s full-length glass sunroof and part-Alcantara upholstery helped boost its premium feel. There’s a mix of soft-touch materials and metal trim finishers, along with comfy and supportive seats.

Space on-board is plentiful, enabling five adults to travel with little fuss. The boot offers 555 litres of space, which is slightly more than a Qashqai but slightly less than a Sportage.

All Australs come with a high level of kit. The base Techno has 19-inch alloys, LED headlights, keyless entry, parking sensors and a reversing camera.

Prices start at £34,695, which is about £5,000 more than the most expensive Kadjar but on par with a Hyundai Tuscon Hybrid. Thanks to its lower emissions, the Austral will save drivers more than £400 per year in company tax bills over the Tucson.

Renault has certainly upped its game in the medium SUV segment with the new Austral, but it hasn’t really moved the goalpost. Sure, it has a high-quality interior, impressive technology and competitive running costs, but some of the brand’s efforts to be more ‘premium’ have come at the expense of ride quality. And we’re not convinced that the new hybrid powertrain is advanced enough to compete against rivals that offer plug-in technology.

With Renault's evolution plans in mind, we can’t help but think that if the Austral was fully electric it would be a true game-changer in this segment.