IN 1989 Kia and Hyundai were selling modest numbers of cars on the strength of a low price and decently full equipment levels.

That year Fiat was celebrating the crowning of its Tipo as European Car of the Year and the future for this family-sized hatch looked rosy. The successor would surely be better still.

But it never happened. In the 27 years since then the Italian car giant shrunk its range so the tiny 500 now makes the money and Kia and Hyundai no longer make cheap cars, selling instead on value for money.

But now - roll of drums - the next Tipo has arrived and it's built in Turkey to keep costs down and is coming to the UK in September, starting at £12,995 and looking to take on the likes of Kia and Hyundai by costing less and offering more. How about that for table turning.

At the world launch of the car - ironically in an empty factory in Turin that once made Fiat diesel engines - there was no lack of marketing hype (there never is), promising us that the Tipo is the best value for money on the market.

We shall see, but first signs are promising. It drives like a dearer car, looks smart in a modern mid-European way and comes well kitted out for the money.

But so does the Hyundai i30, to pluck one obvious competitor from the back of your favourite car magazine.

In mainland Europe, where a saloon version of the Tipo has been on sale for a while, they've sold more than 22,000 of them already, helped by a starting price in Spain of £10,200 (even less after a scrappage scheme for old cars, remember that?).

But back to the Tipo in the metal, where we discover a car genuinely spacious enough for a six-footer to sit comfortably behind himself and boots that range from big in the hatch to enormous in the estate. Both are best in class, says Fiat.

We won't be seeing the saloon in the UK because nobody buys them at this end of the market, reserving obvious boots for bigger more prestigious machines with German or Jaguar badges.

Fewer private buyers are going for hatches or estates either, being lured into SUVs instead, but there are evidently enough loyal hatchers to persuade Fiat to invest millions of euros to reenter the market.

In the UK we will have three grades of trim - names to be decided - with even the entry level having standard kit that includes air conditioning, remote central locking, front electric windows, six airbags, DAB radio, Bluetooth and steering wheel remote controls.

The Station Wagon adds £1,000 to the bill as well as roof bars and electric rear windows. A good sat nav system is a reasonable £500 extra with either body shape.

Move up a trim level ((for £1,000) and sat nav drops to £250 because a touch screen infotainment system comes as standard anyway, along with alloy wheels, parking sensors and cruise control.

Another £1,000 (spot the easily grasped 'price walks'?) brings us to the top grade, with an increased goodies' count that includes sat nav with traffic service, bigger alloys, rear view camera, auto lights and wipers and climate control.

We will be offered five engines, three petrol (two 1.4s and a1.6 litres) and a pair of diesels, 1.3 and 1.6 litres, with this smelly fuel duo likely to be the bigger sellers in the UK.

Two different automatic gearboxes are offered, depending on your engine choice, and a decently precise manual six-speed comes as standard.

The more powerful, 120 horsepower diesel (£17,995 in top hatch trim), pulls well and is quiet from start-up, which is far from common. It also showed 49mpg after an 'honest' test route with steep hills, lots of hairpins and lots of stop/start town work. So, it's not going to cost a fortune to run.

Fiat claims 76.3mpg with emissions of 98g/km for this diesel engine.

The Tipo rides well too, with a firmly controlled feel and you can detect the special attention Fiat has given the steering, which remains feelsome and pleasantly direct. As ever with the brand, a button makes it lighter for city work, but, as ever, seems redundant.

Jumping into a 1.6 110 horsepower petrol (£16,995 in hatch mid-trim level) the extra eagerness of the engine to rev was a spur to enjoy the scenic and mildly demanding test route, where the car was a lively, willing companion. It showed 36mpg on the clear trip computer, part of a easily read dash that comes complete with big digital speed readout.

That real world figure was closer to the official figures which are 44.8 to the gallon and a CO2 rating of 147g/km.

Finally, some random details of the newcomer: it has multiple storage compartments scattered round the cabin, the estate will take an object 1.8 metres long, thanks to a body stretched 20cms over the hatch, the rear seats flop forward easily but leave a load floor that is not completely flat... and you can keep up with world news from Reuters in mid range models and above, thanks to a smartphone app.

Good news all round for Fiat? The signs look encouraging.