The standard engine revs nicely. Although the Matrix is quite light, the base engine only delivers 130 horsepower. However, for those who enjoy shifting a lot, it's fun to drive when equipped with the manual transmission. Shifting the manual transmission is smooth and easy. Although it might seem that the upright seating position and the high-mounted gearshift would take some getting used to, this is not the case. Equipped with the five-speed manual, the Matrix with the standard engine gets an EPA-estimated 29/35 mpg City/Highway.

Even with the automatic transmission it feels peppy around town. The engine is buzzy, which will appeal to younger buyers but might become a little annoying to older people.

Steering is precise. And though the center of gravity is relatively high, it doesn't lean much in corners. It feels like a sporty compact car. That's not surprising as it uses many components straight from the sporty Toyota Celica.

In keeping with the car's sporty attributes, the brakes are effective.

We also drove the sporty XRS with the 180-horsepower engine. The power increase comes from improved breathing by using Toyota's variable-valve timing and lift setup. At low revs the engine delivers no more performance than the standard 130-horsepower engine. The real power comes into play between 6000 and 8400 rpm, so you need to keep it wound up in the upper part of the rev range to tap into its performance. The six-speed gearbox comes from the Celica and uses the same gear ratios, but the Matrix uses taller tires effectively giving it taller gears. So you need to wind it up before shifting into the next gear to enjoy good acceleration performance. We quickly grew tired of the high-revving engine, however. We found that the XRS was not nearly as pleasant as the XR. The 130-hp engine seems a better match for the Matrix than the high-strung 180-hp engine.

Four-wheel-drive models are not as sporty as the two-wheel-drive models. As noted, all-wheel drive is only available with an automatic transmission and the 123-hp engine. With more weight (185 pounds) and slightly less power than the front-drive models, plus the friction from the all-wheel-drive system, the 4WD models do not accelerate as quickly. It's still peppy, though, and the all-wheel provides superior traction on snow, ice and slippery pavement. The Matrix XR 4WD automatic is rated 26/31 mpg.