The original Kia Rio was miles off the pace when it launched in 2000 but the formula has been refined since then, to the point where the fourth-generation car you see here has the looks, interior and technology to compete with German and Japanese class leaders. But does it drive like the best? New Atlas spent the week with a fully-loaded Rio SLi to find out.

When it launched last year, the Rio was billed as another giant leap forward for Kia. On first impression, it lives up to that lofty billing. It's a handsome beast in the most expensive SLi trim, with pretty multi-spoke wheels that nicely offset the chrome trim elements and neat LED light signature. Some small cars look better in bright colors, but the Rio even manages to pull off its subtle Platinum Graphite hue.

This premium focus continues inside, where the Rio really delivers. The range-topping car comes with pleather seats, soft-touch door trims and climate control, and the infotainment system is one of the best in the business. Apple CarPlay and Android Auto are included in all models, and the base Kia software is both attractive and snappy. With that said, it does miss out on auto-emergency braking and lane-keeping assist, which don't even appear on the options list.

Beyond being easy on the eye, the cabin is practical too. Its high roofline leaves plenty of headroom for tall drivers, and the seats drop nice and low. The driving position is actually better in the Rio than it is in the bigger, more expensive Sportage, although the seats are a little bit flat for my liking. Back seat passengers are treated to plenty of legroom, and the 321-l (11.3-cu.ft) boot is right on par for the class.

All good then! The engineers in South Korea have hit the nail on the head, so it's time to go home and celebrate the fact the Rio can go head-to-head with the class leaders. You knew there was a but coming, didn't you? Because the Rio is let down in the powertrain department.

The car is powered by a naturally aspirated 1.4-liter four cylinder with 74 kW (99 hp) of power and 133 Nm of torque. Although the base model can be paired with a six-speed manual gearbox, upscale Si and SLi are stuck with an archaic four-speed auto gearbox, with no alternative. Yep, you can still buy a brand new car with a four-speed automatic in 2017. What a time to be alive.

The decision to sell the Rio with such an underpowered engine and old-fashioned gearbox is tough to explain – especially when you consider that the old model was available with a more powerful 1.6 and a six-speed. Sure, claimed economy is decent at 6.2 l/100 km (38 mpg), but that's still roughly on par with its predecessor, and we didn't see it dip below 9.0 l/100 km (26 mpg) in the real world.

Unfortunately, the old-fashioned powertrain takes what should be a very compelling package and reduces it to also-ran status. Performance is barely acceptable at city speeds, and overtaking anyone at highway pace involves plenty of forward planning. A set of earplugs wouldn't hurt either, given the amount of noise the engine makes as it closes in on redline. With the lack of ratios on offer, and the dearth of torque down low, you're going to be spending some time near redline if forward progress is high on your list of priorities.

It really is a shame, because the rest of the driving experience is very well sorted. Like the Sportage we reviewed last week, the Rio has been treated to a special suspension tune for Australia and it shines. The steering transitions from light at low speed to hefty at high speed, and the car stays flat through the corners when you throw it around. That doesn't come at the cost of ride comfort, though, because the Rio also handles speed bumps and potholes with aplomb. It feels refined, and that isn't an easy thing to do in a 1,200 kg (2,646 lb) supermini.

With a starting price of AUD$22,990 in SLi trim, the car is simply too expensive to be running around with a four-speed auto. We'd be waiting for an upgrade in the engine and gearbox into the car before laying down our hard earned. When that happens, the quality suspension tune, refined interior and sharp design will help put it up with the class leaders.

This Kia Rio will be on sale in the USA for 2018, complete with the 1.6-liter engine and six-speed automatic gearbox Australia doesn't get. European buyers get the car with a 1.0-liter turbocharged triple and a diesel option.

Product page: Kia (Australia)

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