Daewoo has always lacked a competitive rival for cheaper Ford Focus and Vauxhall Astras. Previous models have at best been mediocre, lacking the space, driving enjoyment and refinement of more desirable competition. The new Lacetti is therefore a first for the still-young company. Born from the bankrupt Daewoo Cars operation, the intention is for GM Daewoo Auto and Technology (to give it its full name) to become a 'value' brand below Vauxhall and Saab (another GM company) in the UK, and the Lacetti is key to those aspirations. Owing nothing to Vauxhall apart from engines and manual transmission, it's the last of the original company's designs, and is basically a Nubira hatchback - albeit one with a body styled by Giugiaro, rather than Pininfarina.

The Lacetti is a surprisingly large car. At 4295mm long, it's larger than a Ford Focus, Renault Megane, Seat Leon and Toyota Corolla, which promises good accommodation inside. It's a little wider than the class norm too, and offers significantly more room than the Kalos supermini - for, in 1.4-litre 16v SE base trim, not a huge amount more cash. Rivals will include home opponent Hyundai, though competition's weak here as all it can offer is the dated Accent; between the two, Daewoo's model is infinitely superior. A greater challenge comes from the aforementioned Seat, though buyers of five-door superminis may also be impressed with the Lacetti's package, too. Certainly Daewoo has cleared the first hurdle - competitive pricing - with ease.

Daewoo reckons customers will be growing young families. We can see the logic but feel the Lacetti is equally likely to win favour with older drivers who like its hassle-free package; remember, all Daewoos come with three year's free servicing as well as warranty and breakdown cover, while the list price is no-haggle. Younger buyers tend to gravitate both towards brands and, increasingly, practical compact MPVs. Good value though the Lacetti is, A Volkswagen roundel or Ford C-MAX's practicality may just squeeze out the extra £3,000 or so.

Giugiaro styling is well-proportioned, modern and distinctive. It looks like the new Astra from the front, has hints of the Audi A3 at the rear and has a high waistline which looks sporty. The interior is Nubira-derived but easy to use, and the Lacetti-unique rubberised dash top moulding is attractive. Equipment is also very generous, with even base models offering ABS, CD player and electric windows; the test 1.6 SX added side airbags, air conditioning and alloy wheels. In normal driving the chassis is firm, resisting roll well and proving neat and tidy through corners. And, while steering is not packed with feel, it is at least reasonably sharp and linear. It's essentially a safe, reassuring car that offers few challenges to drivers. Firm seats offer comfort once a good driving position has been achieved, visibility is good and the instruments are attractively illuminated in green at night.

The 1.6-litre engine can be intrusive, proving quite raucous when revved. At least it has more 'pull' than the 1.4-litre, which requires too many revs and exacerbates this effect. The gearchange is also pretty poor; notchy, not always fluid and vague too. Drivers of old Vauxhall Astras will find it familiar. Handling is dominated by understeer near the limit - safe but not much fun - and the ride quality is on the firm side, bordering on uncomfortable over particularly scarred roads. Brake feel is unusual, with an initial sponginess at odds with the leaden feel as more force is applied. The rear of the cabin is commendably roomy but is spoilt by two points; feet can't be placed fully under the front seats and the rear bench base is too short. Both compromise comfort, while the seat trim itself appears to be seeking refuge from a cheap sofa.

Firm seats initially feel too flat, but extensive height adjustment for the driver cures this, even if it does place their knees too close to the steering wheel. Other controls are well laid-out, the instruments are clear and the Blaupunkt CD player is decent. Fuel economy of nearly 40mpg is praiseworthy (the 1.6-litre matches the 1.4-litre, despite superior performance) and the servicing and warranty package guarantees no hassle for three years. As for residuals, experts note the Kalos is performing well in its sector, and are making reasonably reassuring noises about the Lacetti too. Certainly the pricing is spot-on to stem any steep initial losses. Decent build quality will help too.

In many ways it's hard for us to criticise the Lacetti. For the money (near-supermini money for a roomy family hatch, remember), it offers sharp styling, plentiful equipment and driving manners up to modern standards. It's safe, unchallenging to drive and accommodating. However, there's always the qualifier 'for the money' Buyers need to accept the fact that new variants of the Ford Focus, Vauxhall Astra and Volkswagen Golf outclass it, and others such as the Mazda3 and (to a lesser extent) the Renault Megane, are superior but costlier, too. But they probably will as, for those supermini prices, the Lacetti is perfectly commendable. Sure, the engine's too noisy, ride quality unsettled and handling dull for faster motoring, but judge it by equipment and space, and it's on the pace. Not ground-breaking but perfectly OK. For the money.