The squircle. It’s one of those slightly ridiculous, post-millennial words that any writer worth his or her salt ought to avoid. Yet before long, it’ll probably be making an appearance in the Oxford English Dictionary. And given that the squared-off circle shape (square + circle = squircle, just so we’re clear) pretty much dominates every interaction you have with the new Fiat Panda, we’ll make no apologies for its repeated use throughout this article.

Our quick take

When we saw that Fiat had rounded off the resolutely square Panda, at first we thought the company had thrown away a quality that made the car unique in today’s market. Instead, the rounded-square design qualities could be a metaphor for the poor qualities of the last model that Fiat has simply rounded off and improved.

Most impressively, it’s still wonderfully versatile for something so small, there’s still a uniqueness to its character, but now it’s a little more fun, easygoing and - that dreaded word - personalisable. We can’t give it any higher praise than to say we can’t think of another small car we’d rather drive. The Volkswagen Up! runs it close and is arguably more sophisticated and big-car feeling. But it’s a little too serious and lacking in the type of character the Panda’s full of, for our liking too.

In fact, the Panda’s now so good and no longer such the obvious ugly duckling in the family, that unless you’re really determined to follow fashion, we can’t understand why you’d choose a less-practical, more-expensive 500 over one of these. It’s a cracker.

Fiat Panda Easy TwinAir - 4.5 / 5

It’s important because the first two Pandas – the second generation having been replaced by this car – were resolutely square little boxes on wheels. That’s not to say they were poor pieces of design – far from it. But this new one? Well, it’s had the corners knocked off and become a lot more rounded, gaining it newfound robust looks, and arguably a cheekier, more playful character in the process. Question is, have the Panda’s new curvy qualities increased its appeal and made it a better car?

Design

Part of the reason there have been only three Pandas to date is that the designs have a timeless, simple quality. The Panda was so deliberately unfashionable that somehow it became fashionable and classless. Driven by college kids, farmers, pensioners and finely dressed Italian establishment alike, it’s done so by being resolutely functional. It’s a tiny city car, yet was rare in its class for being able to seat four people and have space for all the detritus that collects in cars – handbags, drink bottles, mobile phones, keys, notebooks.

At first sight, the rounded qualities and squirc-ular (sorry) theme of the new Panda suggest Fiat has tried to edge it away from the purely utilitarian to something that’s more fashionable and style-led. It’s true that the squircle shape is everywhere – the lamps, window forms, door handles. And it's even more apparent on the interior where every element you touch and see - gauges, steering wheel, door handles, door pockets, handbrake, climate controls - is a rounded-square shape.

But the versatile, functional qualities of the Panda have not been lost - they’ve been enhanced. Note the cut-out in the dashboard, which is big enough to hold a reasonable large handbag (and there’s still a glovebox underneath). The three cup holders on the centre console. And space in the door bins for bottles of water – and an umbrella or small bag.

It’s a deeply impressive and appealing interior, because it simply works as a space to be in. But then as you spend more time with it, you notice and appreciate the little details – the fact that the dashboard and door plastic have a tiny intaglio surface print which spells out “p-a-n-d-a”. That the handbrake liberates extra space between the seats when it’s not engaged. And that, above all, you’re in a characterful, charming interior which – although it doesn’t use the kind of soft plastics we typically harp on about cars in the class above needing – is a really great place to sit. In design terms, it’s leagues above any other car on sale today at this price.

Technology

As you might expect with a ten grand city car, our Panda wasn’t exactly stuffed full of the latest navigation technology or internet connectivity functions. But Fiat’s partnership with Microsoft and the resultant “Blue and me” technology is, we reckon, a good example of how to give the customer most of the connectivity and technology they want and expect in a car today, without overcomplicating the interface or the look of the dashboard.

you simply plug in your device via the USB/aux port by the gearstick, then chuck your phone into the cubby in front of it and stab the media button on the radio to get at tunes via your phone.

There’s Bluetooth too: you need to find the car with your phone and then make up a pin to pair it, which you have to do via the menu settings of the trip computer – and is only possible when stationary. But although there’s no 8-inch screen to tell you what’s happening, this is the second Fiat we’ve had with this technology, which has happily connected to iPhones 3G, 4, 5 and a Blackberry Curve in just a few seconds - we wish that was true of some more-expensive systems.

You can then make calls via the trip menu in the gauge cluster, in conjunction with the steering wheel controls. This works pretty well, allowing you to shuttle through your address book in A-C, D-E, F-J type jumps, rather than making you wade through 500 contacts in one never-ending scroll. Our only gripe was the placement of one steering wheel button, which falls perfectly under your left thumb. It performs a last number redial and is far too easy to hit in normal driving. So we’re sorry if you’re one of the people who kept getting phantom called by us again and again.

It’s worth noting that, like a lot of cars in this segment, Fiat doesn’t offer its own bespoke, in-dash touchscreen Sat Nav system in the Panda. But like the 500 we tested last year, you do get a dash-top port slot, which allows you to drop in a Fiat-branded TomTom plug in device. It’s more expensive than buying one from Argos, but loads cheaper than most manufacturers' systems and will ‘talk’ to the car, as well as charging up via this dashtop slot without wires trailing everywhere. So it’s worth a thought if you know you need and want nav.

Driving

Fiat sent us its Twin Air petrol engined Panda for test evaluation. You can get a regular, four-cylinder 1.2 petrol or a 1.3 turbo diesel too, but the Twin Air’s interesting - it’s a tiny two-cylinder turbo-charged unit which is supposed to offer a brilliant blend of performance when you need it and economy when you don’t.

When we tested this engine for the first time in the 500 last year, we fell for it’s character and performance, but weren’t at all endeared by its 32mpg average fuel economy antics.

We thought we’d try a bit harder in the Panda and did a couple of long motorway runs, following Fiat’s advice to change up before it feels natural to do so. And, lo and behold, we were rewarded with 48mpg. Problem is, the engine’s effervescent character cries out to be worked, which means that after a while you inevitably give in, use most of the rev range and – in our case – drop back to 39mpg. We’ll leave it up to you to decide how you drive and if that’s acceptable fuel economy.

If you’re desperate to achieve 50-70 mpg figures, we’d point you towards the diesel. But bear in mind that if you only do a few thousand miles a year, the extra cost of diesel fuel at the moment means that you might not be saving as much as you think. You’ll also be missing out on an engine that adds an extra layer of character to this great car and can be surprisingly fast in certain circumstances – it happily cruises in the motorway fast lane with the rear-bumper magnetised Audi A5s. It’s just a pity that at 70mph plus the wind noise around the A-pillar and mirrors gets a bit intrusive.

This car rides a lot better than the old Panda, too. The wheelbase is still short, so it can be caught out by vertical ridges in the road and speed humps you spot late, but there’s just the right amount of body rolls versus ride comfort balance, making the Panda comfortable most of the time and fun enough if you feel the need to let your hair down.

To recap

Fiat rounds the square corners off the Panda, but leaves it character intact. Less utilitarian than before, but no less versatile this is a true "everyman" car that’s brimming with character and provides numerous qualities at a small price tag