HOW gutsy is Citroen Automobiles Australia by refusing to compromise on its latest DS3, even when that may cost it half its potential sales?It has refused the automatic version of the DS3, saying the four-speed automatic unit offered was old and not in keeping with the spirit of the refreshed new hatch and cabrio.

Automatics made up 49 per cent of the sales of the previous DS3 – a big slice that Citroen in Australia won’t get until France finds a better self-shifter, likely the six-cog unit in the Picasso.

But that’s about the only complaint. And for those who love to drive, it’s actually not a complaint at all.

The latest Citroen DS3 is outwardly similar to the previous model, given it is simply a light facelift, and retains two body-styles, a hatchback from $33,990, plus on-roads, and a cabrio with a sliding fabric roof that retracts like an extended sunroof from $36,590. Now, however, it arrives in one trim specification called DSport with one drivetrain.

The compressed styling of the DS3 and its shark’s fin B-pillar design continue.

While promptly identified on the street, its appearance is not unlike that of the Fiat 500. No surprise that their birthplaces are within the crush of densely populated and compacted dimensions of major European cities.

There’s only one reference to Citroen on this car (on the boot lid) as the DS brand starts to pull away from its parent, striving to step up to a niche luxury position.

That reflects the equipment level and perceived quality of the little car and that’s no better seen than in the cabin where leather takes a backseat – literally – to the lacquered carbon-fibre dashboard fascia, the textured soft-feel dash top and the wide-open faces of the three-dial instrument binnacle.

At less than 4m long, it’s quite a small car yet for the front occupants, it doesn’t feel cramped. In fact the sunken glovebox offers plenty of legroom for the front passenger and, combined with the long door, makes it an easy car to enter without losing any elegance in the process.

The seats are very well bolstered to give excellent long-distance comfort and support through the corners – a sideways action that this car thoroughly embraces and one that the driver will enjoy exploiting.

There’s less joy for the rear passengers. While it will accommodate two adults with good legroom and sufficient headroom (it never felt tight for me at 1.77m), the heavy B-pillar, tiny fixed side glass and all-black décor could induce a sense of claustrophobia.

But human cargo aside, the rear seat is split and folds almost flat for a decent cargo area. With the rear seats in situ, there’s a reasonable 285 litres for the hardtop hatch.

The DS3 comes with a tweaked version of the PSA 1.6-litre turbocharged petrol engine once fitted also to the previous-gen Mini.

If it was a spirited engine before, it has now matured into a more relaxed powerplant with more mumbo delivered across a wider rev range. It makes the car, especially in manual, a much easier car to drive.

Through the winding and altitude-flexing greenhouse of Queensland’s Mt Glorious, the DS3 was as unfussed in its performance as it was with its crisp, flat-stance handling and unexpectedly supple suspension.

As an experiment, a 15km section of the narrow, snaking road and an open section beyond was done with the car left in third gear. From as low as 1000rpm to almost 4000rpm, the 240Nm of torque from 1400rpm made further gear changes unnecessary.

That flexibility translates to the city and denser traffic and could almost excuse a buyer from ignoring an automatic option. If there was one.

More impressive than the engine’s elastic character was the suspension.

References may point to the DS3 as being a competitor to the Mini – size, accommodation, price and status – but where the Mini has handling reminiscent of a refined go-kart for two adults, the DS3 is more supple, putting comfort slightly ahead of handling.

The Mini may bump and skip its way around some poorly-paved Mt Glorious corners but the DS3 would travel a bit slower but soak the ruts and barely concern its occupants.

Perhaps I had too much fun. Citroen Automobiles Australia claim the DS3 – both hatch and cabrio – will sip 5.6 litres per 100 kilometres. On test, on those Queensland roads, the tester delivered 8.2L/100km.

And there was some mild annoyances with some features of the DS3. Europeans clearly don’t believe that drinks are allowed on board. The one and only cupholder in the DS3 is an angled hole in the forward section of the small centre console better suited to a babychino than an adult cup.

It’s hard to find a place for your mobile phone and wallet, for example, and the lidded centre box nicely folds up and out of the way of the driver’s elbow but is also tiny.

Driver visibility isn’t great, interrupted by big A-pillars and B-pillars. The cabrio fares worse, with a small glass rear window and, when folded completely, removes any rear vision.

But it drives so well. It looks distinctive and is nippy through traffic, dead easy to park and ostensibly easy on fuel. It’s not outrageously expensive, either. With six years of warranty and capped-price servicing, it even makes financial sense.