Mercedes-Benz is going through a tough time. Not only are profits down, but it has been producing cars of such poor quality that its staple E-class saloon has just come bottom of the JD Power quality index in the US - unthinkable 20 years ago. These difficulties are the result of growing pains. In the late 1980s, Daimler-Benz - which owns Mercedes - bought America's Chrysler Corporation, took stakes in Mitsubishi and Hyundai, expanded its product range and, astonishingly, downgraded quality to reduce costs. These strategies have since unravelled. It sold its stake in Hyundai, no longer runs Mitsubishi and is only now making profits from Chrysler. But the full effects of cutting quality have still to work through.
So, dare you buy a Benz? Well, this latest A-class is a fine car. It's too early to say whether it will be reliable, but it was developed after Mercedes had seen the error of its ways, so there's hope. It's the second-generation A-class, the first having achieved notoriety when it failed the elk test performed by a Swedish motoring magazine. This demands a sudden swerve to avoid an imaginary elk - colliding with these animals is a real threat in Scandinavia. The manouevre felled the baby Mercedes.
The company had to halt the launch and re-engineer the design. But the brand bounced back, as did the A-class, because it was a cleverly designed car.
Yet there were flaws, including quality. Hard seats and an average ride made the A-class a compromised drive. But the basic concept was brilliant, and Mercedes has battled to overcome the original's drawbacks. Step aboard this latest A-class, and you'll enjoy an ambience and quality of finish worthy of Benz's better-made big cars. It's a little bigger, but still smaller than the average supermini and seats five adults in comfort. Order it with the £240 Easy Vario Plus system and you get removeable seats and a front passenger seat whose backrest folds forwards to accommodate long loads. The boot is big, but with the seats removed you have a small van.
It certainly doesn't drive like one, however. The mid-range 1.7-litre engine tested, with a choice of six petrol and diesel engines, hauls you smoothly to 60 mph in 10.2 seconds via a slick-shifting five-speed gearbox.
The big improvements are seats that remain comfortable after more than an hour, and a ride so supple that you'll rarely notice the road below.
And it's an enjoyable drive, deftly scudding through corners. Its fuel consumption - you can score 40 mpg on a long run - is just as pleasing.
Are there drawbacks? Assuming that quality is OK, the only problem might be price. If you can accept that you're getting a much smaller car for your money - and you should, because it provides more cabin space than most rivals - the base prices aren't too bad. But the option list is long and tempting, making a tilt at £20k easy to achieve. Buy wisely, though, and you'll get the most intelligently designed small car on the market today.
Max power 115bhp
Max torque 144 lb ft
Max speed 113 mph
0-62 mph 10.2 sec
Fuel consumption 42.8 mpg
CO2 emissions 157 g/km
Ford Focus C-Max 2.0 Ghia £17,190
Well-made conventional MPV, more powerful but less cleverly packaged.
Harder to park, too.
VW Golf 1.6 FSI SE £15,285
Classy if conventional hatchback. Cheaper and a good all-rounder, but
nowhere near as versatile.