Still, you know this isn't a Lexus, or even a Camry, from the clearly heard engine and some road noise. These are constant reminders of the car's small size and light weight, but there's little else about its road manners to complain about. The reason for that is its extremely rigid structure. Various braces and crossmembers were designed to offset vibration and several types of undercoatings and damping materials were applied to reduce noise, and the results are impressive. Rough road, railroad tracks and potholes are certainly felt but are pleasantly muted by the solid integrity of the chassis.

The Yaris has no problem keeping up with traffic and is especially usable for in-town duty. The engine revs freely and smoothly and will tolerate near-redline rpm without squawking. On the highway, fifth gear is definitely just for cruising, but a quick downshift to fourth delivers comfortable passing power. The 1.5-liter four-cylinder engine features variable valve timing, direct ignition and an electronic throttle. It's the same engine used in the Scion xA.

The five-speed manual transmission is a joy to work, both around town and in the wide-open spaces. The shifts are creamy smooth and the gear ratios are well spaced, especially for the cut and thrust of city life. First gear delivers good throttle response, while second and third are flexible enough that it's easy to keep the engine's power flowing smoothly without having to constantly row the shift lever. Fourth gear is good for passing at highway speeds, while fifth allows comfortable cruising up to about 80 mph.

The four-speed automatic works well, too. Some acceleration power is compromised, but the smooth upshifts and crisp downshifts make it a commuter's best friend. The automatic features a gated shifter, and the shift lever is well placed and a cinch to operate.

The 14-inch tires that come standard prefer city work to excursions through the canyons. The optional 15-inch running gear sharpens handling and steering and makes the car an agreeable companion through the corners. There's still some body roll when the corners get tight, but it comes and goes with no surprises or awkward weight transitions. The front independent suspension is newly developed. The torsion beam rear suspension features anti-lift geometry for more stable braking, and a toe correction function for enhanced straight line stability.

The electric power steering rack adds to the confidence-inspiring road manners. Not only does it help fuel mileage by eliminating a power-sapping hydraulic pump, it can be tuned for a specific feel, and Toyota's engineers did a marvelous job making this one feel just right, with crisp response to driver input and plenty of on-center feel.

An economy car must, of course, use only an economical amount of fuel. The 2008 Yaris is EPA-rated at 29 mpg City, 36 mpg Highway (or 35 Highway with the automatic), according to the stringent new EPA test methods. How much a Yaris actually achieves is entirely up to the driver, but because of its flexible powertrain and economy-directed gear ratios, we believe that reaching the 2008 figures is entirely possible.