We've just spent a few hours behind the wheel of the Hyundai Grand i10, the new hatchback in India from the carmaker and all things considered, we are pretty impressed. Hyundai has had its fair share of well-engineered cars over the years, but this next-generation i10, built on a specially stretched wheelbase for India, really does seem like it has almost everything Indian car buyers want.

To begin with, it isn't the most stylish or radical looking car around. Hyundai's much talked-about 'Fluidic Sculpture' styling is missing on this car. The lines are straighter and the details more crisp, but that only means they are easier to digest – less love/hate. The hexagonal grille is the focal point of the design. Around it are assembled the slot-like upper grille, the tapering headlights and the fog light enclosures. The long, 2,425mm wheelbase, specially extended to give more space to Indian customers, could have made this car look ungainly, but Hyundai has added a thick black stylistic accent at the bottom of the Grand i10's doors that help reduce visual length.

Other changes specially made for India include a less rakish window line for better visibility out from the rear, a new C-pillar and larger rear doors, which makes getting in and out easy. The highlight of the rear really is the wraparound tail-lamps, which extend deep into the shoulder line to give a nice stylistic touch. Oh, and let's not forget the 14-inch diamond-cut alloys – they look really special.

This car is even more impressive on the inside. Beautifully built and loaded with features, the insides of the Hyundai Grand i10 have a crisp and fresh feel to them. The design of the two-tone dash is neat and clean, with no extraneous or over-styled features giving it a mature look. The top half is finished in high-quality, non-reflective black plastic. Half the centre console, the instrument panel and half the door pads are finished in this colour. A rich toffee-like beige is used for the rest. Plastic quality is as high, if not higher than that seen in the Verna, and fit and finish are spot on as well. The steering wheel and gear lever, for example, are beautifully detailed, and Hyundai has used faux metallic highlights to good effect.

The airy feel of the cabin and the feeling of spaciousness are enhanced by the big seats, which have a bit of a sporty feel to them. The good news is that even very tall drivers can be comfortable behind the wheel without affecting rear legroom; there is just so much space here. The rear seats have very impressive legroom and good thigh support, but passengers in the back are sat a bit low. And while they do get an air-con vent, the Grand isn't really as wide as a Hyundai i20 or Tata Vista in the back. There's plenty of storage spaces inside the cabin, though, with one-litre bottle holders in each of the doors, two large cup-holders behind the gearlever, and a cubbyhole for storing your phone or tablet near the handbrake.

The carmaker has always been strong on features and options, and this top Asta trim of the Hyundai Grand i10 is no exception. You get a cooled glove box, keyless go and a two-DIN integrated audio system with 1GB of onboard storage for your music and Bluetooth connectivity for your phone. Audio quality is fairly decent and pairing your smartphone won’t take you more than a minute either. Also, the audio controls on the steering wheel are well positioned with large buttons for functions you’d use the most such as mute or volume control. Climate control is missing, however, and you don't get airbags or ABS as standard, even on this top-end version; you have to pay extra and opt for them. What makes it even worse is that you can only get this on the Asta trim.

This new hatchback also gets a new power source; an all-new, 1.1-litre, three-cylinder diesel motor (codename: U2) which develops 70bhp. Now, diesel engines and three cylinders don't really go well together, as both are inherently prone to vibration, so it's no surprise that the Grand i10 flutters and vibrates softly at idle. This new engine may be essentially Hyundai's 1.4 four-cylinder unit with a cylinder chopped off, but that creamy idle is gone.

Counter-balancing shafts have been used to iron out the inherent imbalance of a three-cylinder configuration, so when you rev the engine, it smoothens out a bit. There is a hint of turbo lag, but after 1,500rpm, the motor pulls cleanly and with a fair amount of enthusiasm.

Performance feels smooth and linear at best, but you truly miss that strong surge in the mid-range that is so typical of more powerful diesel motors. The top-end isn’t strong either, and the engine labours as you cross the 3,500rpm mark, so it's best to upshift early. Refinement on the move, however, is pretty good. At low revs, the engine is never intrusive and it's only when you near the redline that you can really tell it’s a diesel. It must be said that this motor lacks the punch needed to really make the Grand i10 fun to drive, but the new Hyundai does have the right gearing for city driving. The short gearing makes you feel at home in the city and coupled with short throws, navigating through the box isn’t tiresome.

We also had a go in the petrol version of the Grand i10 with the manual gearbox (it's also available with a four-speed automatic). It uses the same 1.2-litre 'Kappa 2' four-cylinder motor as the current i10, which is equipped with variable valve timing (VVT in Hyundai speak).And just like the i10, it feels fairly peppy to drive. It may lack the outright performance of cars like the Swift or the Brio but, the power delivery is smooth and there is adequate power throughout most of the rev-range. You get useable power from 1500rpm and this makes it comfortable to drive in the city. Also, a strong mid-range means you can easily cruise at a reasonable 100kph on the highway and still have some power left in reserve for a quick overtaking manoeuvre.

Compared to the standard i10, the Grand i10 is a good leap forward in terms of ride and handling. To begin with, the car maintains its composure at highway speeds well. The electrically powered steering is quite light, so it is great at city speeds, but it also adequately weighs up as you go faster, making it less nervous than the i10 and even the i20. Overall, the steering has shed a bit of the typical vagueness associated with many Hyundai cars and does feel more accurate and inspires more confidence when turning into corners. But, there is still a bit of that ‘floating’ feeling embedded in the steering system, especially when compared to that of the Maruti Swift or Ford Figo. That said, the steering definitely isn’t a deal breaker and for this car, it isn’t a bottleneck in the overall performance either. In terms of braking, the i10 Grand has well specified brakes and the ABS is nicely calibrated with a good progressive bite.

Ride quality is an area that holds a lot of importance in India – thanks to the lack of well laden roads. The Grand i10’s suspension displays a suppleness that's nearly perfect for our roads. In typical Hyundai fashion, the suspension is on the softer side but, unlike the i20 and the Verna, it isn’t overly soft and hence, the car retains a good portion of its absorbent ride even at higher speeds. Over small to moderate sized bumps and potholes, the Grand exhibits excellent bump absorption. The suspension feels meaty and the cushioning is more than adequate for a car in this segment. But, hit a larger pothole at moderate speeds and the vibrations do filter into the cabin, accompanied by a crashing sound. Also, while the ride at the front is quite good, passengers at the rear will experience a bit of vertical movement, especially at higher speeds. However, drive the car sensibly over rough roads and you won’t have much to complain about.

The Grand i10 is a huge step forward for Hyundai. It delivers plenty of space, high-quality interiors and the efficiency of a diesel in a well-built, modern package. It rides beautifully, drives well and is generally well equipped too. The diesel motor should have been a bit more punchy and anti-lock brakes and airbags should have been standard, at least on the top-of-the-line version. Still, at Rs 6.41 lakh for the Asta diesel (and Rs 5.47 lakh for the Asta petrol), it's a lot of car for your money, and a good blend of the elements that Indian car buyers are looking for.