IT'S been 125 years since Mercedes-Benz brought us the motor car yet in that time there has never been such a radical new model in its line up as the latest B-Class.

The second generation family hatchback has been completely reworked from tip to toe.

Mercedes says that no model change in the history of the brand has seen so many new developments introduced in one fell swoop.

New engines, advanced safety systems, suspension and steering updates plus a total restyle see the latest B-Class move from middle of the road to fast lane.

The car drives brilliantly, is exceptionally comfortable and has incredible fuel economy.

It is as aerodynamic as they come and the 1.8-litre diesel version can average 64 to the gallon with tax friendly emissions of 115g/km.

Not only has the car been transformed technically the interior is also a revelation setting out a new style which will be adopted across the Mercedes range in the future.

A smart facia incorporating luxury touches such as air vents similar to those in the SLS supercar and a full colour display screen which resembles an iPad.

Head and leg room in the rear are immense for a relatively small car which will rival the likes of the Ford C-MAX while boot space of 486 litres is as big as a large saloon.

A height adjustable boot floor adds a further 72 litres of space when lowered and there's also a rear seat armrest which when down can allow access to the boot enabling longer items to be accommodated.

A folding and adjustable rear seat which increases legroom and cargo capacity to more than 600 litres is not a standard feature but an option.

The new B-Class marks the start of an offensive by Mercedes in the small car market which will be followed up with an all-new A-Class next year as well as a four-seater coupe.

Priced from £21,290 to £26,160 the B-Class is very much a premium model and in every way a full blown Mercedes.

Handling is taught and precise, it grips the road well and there is little body roll - something which plagued the original.

The ride is helped by a new chassis and revised rear suspension while the car itself has a lower centre of gravity with the double floor arrangement of the previous B-Class no longer a feature of the design.

Four power choices are available with new 1.6-litre petrol engines developing either 122 or 156bhp and 1.8-litre diesels delivering 109 and 136.

Six speed manual transmissions or seven speed semi-automatic gearboxes can be fitted on all versions in the range - the latter costing £1,450 more - and fuel saving stop/start technology is standard.

So is an electronic parking brake, which strangely for a car that is positioned upmarket does not release automatically.

On the safety front the car is class leading using a radar based monitor to give potential rear end collision alerts. There is also a driver fatigue warning system which detects drowsiness - a feature first seen on more expensive Mercedes models.

Another touch making its way down from the larger cars are door mounted electric seat adjusters as seen on the C-Class range.

Of the four engines the pick of the bunch has to be the 109bhp diesel in the B180 CDi.

It has plenty of punch with a 0 to 60 time of 10.9 seconds, a top speed of 118mph with excellent fuel economy of 64.2mpg - a figure which is not only easily achievable but can be improved upon with a touch of careful driving.

The petrol models, which feel not as gutsy, will return mid to high 40s while the more powerful diesel matches the B180 for economy but costs £1,300 more.

In every way the B-Class has been promoted into quality street and there is an array of extras such as upgraded leather and wooden trim which can make the interior executive grade.

Other options include lane keeping devices, blind spot alerts and a full blown satellite navigation system with Internet connectivity.

Previously the B-Class was something of a misfit falling between the family hatch and compact people mover zones. It also looked fairly boring and its on-road manners were dull.

Now it performs, looks great inside and out and is as rewarding as any other Mercedes.

Little wonder the company is now branding the B-Class as a Tourer rather than a plain hatchback and it is accommodating around town as it is over a long distance.

The B-Class - on sale in the UK next March - has wide appeal, especially for younger families who want a premium marque and also for older drivers who are downsizing but want to retain luxury in their car.

This car is not just the most significantly changed model in Mercedes' history it's also the best compact vehicle the brand has produced so far.