EVER since the launch of the i30 in October 2007, Hyundai has been moving its product range into new territory. The naming of that impressive new small car was meaningful: if buyers got confused with the BMW 1 Series, with which the i30 shares many design cues, that was okay with the Hyundai marketing team.

But the i40 has taken the game to a new level and warrants comparison with Audi’s A4 Avant wagon. Perhaps this should not come as a surprise, given the i40 was designed and engineered at Hyundai’s European Research and Development headquarters in Rüsselsheim, Germany. The ‘Excel Motor Company’ has become a distant memory.

Hyundai buying motivations were once just price, warranty and a measure of youth appeal, but the company’s vehicles now tick nearly all the boxes.

All these passenger vehicles have achieved a five-star ANCAP safety rating. All have a five-year unlimited-kilometre warranty. What’s not to like?

One thing we object to is the way Hyundai executives label their new approach to styling. We wish they would drop the misleading ‘fluidic sculpture’ concept what else can sculpture be, static? And, arguably, the first Hyundai thus described, the ix35 wagon (successor to the Tucson), was over-styled.

The i45 and Elantra were better, more integrated. But the i40 is a beauty. Perhaps a Subaru Liberty has as many different lines and curves but they conflict with each other, making it look ungainly, even ugly, to many. In the case of Hyundai’s i40 Tourer, all the angles cohere.

Perhaps the new wagon is best thought of as a carefully edited i45. The long rear overhang and markedly cab-forward design emphasise the functionality of a load-carrying vehicle, while lowering the visual height of the car the glasshouse is a work of art. Hyundai’s D-pillar design is unique. This must be one of the least boxy wagons ever created.

Tellingly, almost nothing has been lost in the translation from concept car to production vehicle, especially on the Premium which rides on trick 18-inch alloys.

The interior design is quite similar to other recent Hyundais, including the 145 and Elantra. What is notable is the high quality of all the materials and the tasteful way they are combined. There is a pleasing connectedness between exterior and interior design. The dash has a floating feel, as if cantilevered. There is a more modern feel than in any of its (older) rivals, including the Camry and Mondeo.

Even the base model Active impresses with its lovely soft slush-mould crashpad (in contrast to the more common injection-mould technique, this method incorporates a layer of foam beneath the plastic), and classy centre stack arrangement.

Form is important but, especially in the case of a wagon, functionality must not be sacrificed in its achievement. Unbelievably, this compact wagon has superior rear legroom to a Falcon. Even with the front seats set to suit drivers of 185mm, there is plenty of room. And the person who draws the short straw to occupy the middle perch is far less compromised, due to the lack of a transmission tunnel.

The packaging is superb. To look at that rakishly descending roofline, you would expect a lack of headroom for tall occupants in the rear seat. You’d be wrong.

There is plenty of room for luggage and Elite and Premium variants get an innovative luggage rail system. With the rear seats folded flat there is room for 1719 cubic metres of luggage and even with four or five occupants you can still tote 553.

Those who choose the Premium variant will find the sports front seats quite unmatched in this class. The leather is soft and supple. Both front seats are electrically controlled with memory on the driver’s side, as well as heated and ventilated. Facing the highly styled and modern fascia with its piano black highlights, there is the sense that this is a remarkably plush vehicle for $45K.

On the other hand, the Active in six-speed manual form is priced at just $32,490 and although it lacks any hint of piano black, all the ‘fluidic sculpture’ is present and you still get a very long list of standard equipment including nine airbags, anti-whiplash head restraints, the usual safety acronyms plus some more such as HAC (Hill-start Assist Control) and CBC (Cornering Brake Control).

Elaborately designed daytime running lights, an emergency braking alert system which flashes the brake lights and fires up the hazard flashers when you come to a halt, electric handbrake and cruise control/speed-limiter are all standard across the range.

Rich, lustrous paintwork, flawless fit and finish and great quality materials can now almost be taken for granted on Hyundai vehicles. It is difficult to think of any marque (apart from sister brand Kia) which has made such great progress over the past half-decade.

Because the i40 was designed principally for European buyers, maximising fuel economy counted for more than high performance. Anyone who remembers entry-level BMWs, Mercedes and Audis from the 1980s and 1990s will instantly understand this point: initial acceleration was often s-l-o-w!

There are two engines, a 2.0-litre petrol and a 1.7-litre diesel. The entry-level Active variant is available with a six-speed manual or six-speed automatic gearbox, but the Elite and Premium are all equipped with an automatic with paddle shifters.

Neither engine is a powerhouse. The petrol unit features direct fuel-injection and makes 130kW at 6500rpm. Peak torque is adequate at 213Nm but it arrives too high in the rev-range at 4700rpm. What this means is that initial acceleration is modest and overtaking power is disappointing. You need plenty of revs showing on the tachometer to experience much vigour. A bigger engine would be appreciated.

One rival vehicle is the Mondeo EcoBoost wagon, which delivers 149kW of power and 300Nm of torque all the way from 1750rpm to 4500rpm, which translates to far better road performance.

GoAuto’s test i40 Tourer was the mid-range Elite petrol, which represents excellent value at $39,490.

Australians accustomed to Falcons or Commodores may find the i40 underpowered but those familiar with a four-cylinder Camry will be happy. Around town, our i40r was fine but it did not have the kind of urge on steep hills that is taken for granted in 2011. This wagon is so poised that it cries out for more performance. We would have liked at least 10kW of extra power and maybe an additional 40Nm.

Exacerbating matters, the automatic transmission is quite slow-shifting but quicker if you use the neat steering wheel paddles.

Despite its six ratios, our i40 averaged 7.0 litres per 100km. The stop ratio is perhaps a little low for local conditions. On a similar drive in an Audi A4 Avant we used just 6.0L/100km.

For the record, the Active manual is rated at 6.8L/100km, but the diesel engine promises average economy of 4.7L/100km, which is outstanding.

That’s with the manual transmission, but because the 70kg weight penalty is carried over the front wheels, the diesel variants lack that edge of dynamic crispness which contributes so much to the i40’s appeal. You would only quibble after driving a petrol i40 and, even then, only if you pushed really hard.

At low speeds the electric power steering is very light (too light for our taste) but it firms up nicely with speed and at 100 km/h delivers good road feel.

In fact, the i40 Tourer is delightful to drive. Its suspension tune has been calibrated for local conditions, the importer having learnt a tough lesson from its experience at the media launch of the soggy i45 sedan.

It is clear the trenchant criticisms made that day changed the way Hyundai Australia negotiated its local model specifications. They are no BMWs, but both the Elantra and the i40 are far more dynamically competent and feel much better tuned to suit tough country roads, yet ride comfort remains supple.

The i40’s full-size spare wheel is just another ingredient in the careful packaging and noise, vibration and harshness levels are low.

Buyers wishing to downsize from, say, a Commodore wagon will find the i40 superior in virtually every respect except outright performance.

The i40 Tourer’s masterly design, high equipment levels and superb quality put it right at the top of the medium car segment, but it deserves considerably more power in the Australian context, even at the cost of some fuel economy.

Even so, the i40 is not just the most stylish and best-resolved Hyundai ever sold here, but the most suitable for Australians ever.