IT'S measure of the progress made by Kia in recent years that when a relative saw me pull up in Kia's new cee'd Sportswagon, he thought it was a Volkswagen. Quite a compliment.

Another indicator is that few people now describe the cars as low-rent or budget and many more are taken with the competitive pricing, high levels of standard equipment and that industry-leading seven-year warranty.

Put those altogether and you can see why the cars are proving so popular.

The firm had a boost a few years ago, when the last Government introduced the scrappage scheme, which the Korean firm embraced and it has not really looked back since.

There is no doubt that the estate version of the cee'd has a European look because it was designed and engineered at Kia's Frankfurt design studios and technical centre, exclusively for European markets. It's also built in Europe at Kia's state of the art factory in Slovakia.

Having made an impact with the private buying public, Kia is aggressively targeting the business sector with new powertrains, trim packages and pricing and the Sportwagon will be sold exclusively in the UK with the choice of just two diesel engines.

It typical European fashion it is smart but not too snazzy - a bit like some of the market leaders like Golf and Astra.

Longer, lower and narrower than its predecessor the car has a sportier coupe-like stance according to Kia with unique rear doors, integrated roof bars and a new badge adorning the bonnet rather than the revised grille.

If the exterior is smart, but unspectacular, the interior has moved on in leaps and bounds. Previous harsh plastics are now replaced by quality soft-touch finish while the fit and finish is up there challenging the best.

Switchgear feels robust and hardwearing while the dials, major controls and sound system are all neatly and logically laid out especially the centrepiece dash which houses the sat nav, where fitted, audio and cimate controls.

As you would expect from an estate car, practicality is at a premium and the vehicle is capable of carrying substantial loads.

There is 528 litres up to the load cover with all seats upright and 1,642 litres up to the roof with the 60:40 split rear seats folded flat.

The boot floor is flush with the tailgate opening and split rear seat bases and backrests fold to ensure a completely flat load deck. There is also under-floor storage compartment, side load areas, a retractable luggage cover and load-securing net hooks.

Higher-specification models also have sliding aluminium luggage area rails and straps plus a high-level luggage barrier net. Roof rails are standard on every model.

It offers excellent head and leg room with four occupants seated in comfort, although a fifth person makes it a bit of a squeeze.

Of the two engines, there is an entry-level 89bhp 1.4 CRDi while the 1.6 CRDi in the tested model produces 126bhp.

Both transmissions, including the automatic offered with the 1.6-litre engine, are six-speed units, while manual-gearbox models included intelligent stop/start to reduced emissions.

The 1.4-litre has claimed economy of 67.3mpg and CO2 emissions of 109g/km, which means a benefit in kind taxation rate for business user of 15 per cent in 2012-13. The 1.6-litre version I tried, with emissions of 116g/km, falls into the 16 per cent BIK band, and claimed economy of 64.2mpg.

While official figures can be misleading for day to day driving, there is no doubt this is an extremely economical car delivering well in excess of 50mpg over a range of driving conditions.

Fully independent front and rear suspension give the car an excellent ride while handling is decent enough and for comfort wind and road noise is well insulated.

It is available in four trim grades - ‘1', ‘2', ‘3' and ‘4' the option of a ‘4 Tech' version.

All models feature electrically adjustable heated door mirrors, tilt and telescopic steering wheel adjustment and a height-adjustable driver's seat, air conditioning, steering wheel-mounted controls, front electric windows with auto up and down function, daytime running lights, remote central locking, cooled glovebox, ambient front lighting, an iPod-compatible audio system with radio and CD player, USB port, while the goodies mount up as you go up the range.

Safety kits include stability control, hill start while the car also has six airbags.With prices starting at £16,895 and rising to £24,795, and low maintenance and insurance costs, it will be an inexpensive car to run for business motorists and fleet operators, as well as private consumers.