BOMBING DOWN the motorway, CD playing, air-con wafting and keeping up very nicely with the fast-lane flow, it suddenly occurred to me. The Frankel four-person family unit was on board, yet none of us was uncomfortable.We weren’t deafened by road or wind noise; we didn’t feel unsafe. The shopping was in the boot and a smile was on my face. This was incredible. I was driving a car that could be used almost every day by almost all people for almost all purposes yet its unturbocharged engine displaced just 998cc.This is the new Toyota Yaris, and if you thought the old one posed a threat to the European hatchback hegemony, this one is likely to change the composition of supermarket car parks right across the continent.Like all new cars these days, this Yaris is bigger in every significant dimension than the model it replaces and, depending on spec, at least 10 per cent heavier. But it’s still shorter, narrower and lighter than the new class heavyweight, Renault’s now not-so-dainty Clio which, along with the new Fiat Punto, is the newest and most forboding opponent the Yaris will face, at least until we see the Peugeot 207 next spring.The Yaris goes on sale in the new year in three- and five-door form, with three trim levels (T2, T3 and T-Spirit), three engines (1.0, 1.3 and 1.4 diesel) and pricing from £8995 for a three-door 1.0 T2, to £12,795 for a five-door diesel Spirit.We’ll return to the pricing issue in the minute but for now let’s cut to the core of its appeal, which is simply this: if you want a shopping car with Japanese engineering integrity but European visual and, as it turns out, dynamic charm, then it has to be on your shortlist. If you also value a spacious, flexible and carefully considered cabin, from where I’m sitting, it should probably be at the top.And that’s behind the rake and reach adjustable wheel of this three-door 1.0 T3. If you can afford it, the T3 spec with its air conditioning, MP3-compatible CD player and an almost unbelievable seven airbags – in place of the T2’s pair – is the one to have.The cabin rivals the Clio’s for the most spacious in the class and the rear seat must be the most clever: one lever folds it flat into the floor, another slides and reclines it. The driving environment is well designed too: the central digital display is nothing the Renault Twingo wasn’t doing over a decade ago, but it’s thoughtfully executed and easy to read.Visibility is truly panoramic and there are myriad stowage areas, including bottle holders for each passenger to use. There are niggles, however. The pale grey and rock-hard front armrests look and feel horrid and you only have to tap the expensive-looking dash plastics to realise how deceptive appearances can really be.Also, why does only the passenger’s seat slide forward automatically to let people in the back, and why is there a strange lump in the floor just under the accelerator which you feel every time you nail open the throttle? In a car with this little performance that can be more often than not.But what the little 68bhp engine lacks in sheer steam, it makes up for in charm. I’ve always liked small three-cylinder motors more than equivalent four-pots and this smooth and eager example is no different. Yes, you fear the Tories might have another new leader before it reaches a decent cruising speed, but once there the amazing aerodynamics (the Cd is just 0.30) mean maintaining your speed is easy.The chassis is better still and suggests that Renault may come to regret making the Clio such an able but ultimately dull car to drive. The Yaris rides exceptionally well given the shortness of the wheelbase, yet is genuinely good fun at roundabout speed. It feels alive and agile in a way the likes of the Clio, 206 and Citroën C3 simply do not. It’s a sad day for the legend of the small French hatch when every one of them is outdriven by a Japanese tin box.Around town owners will appreciate the lightness of the steering and the tightness of the turning circle. There’s a big boot and useful underfloor storage too, even if the parcel shelf, like too many of the other fittings, seems rather flimsy.In short, it’s a winner. Or, to be more accurate, it deserves to be. But the fact is that, model for model, Toyota has raised the price of Yaris ownership by an eye-watering average of £1700, compared to the typical £250 Renault has bunged on the price of its new Clio. In an instant the Yaris has gone from being one of the very cheapest cars in the class to among the most expensive.My judgement is that this fine little car is good enough to warrant it; whether the market will pay for it is another matter altogether.