MITSUBISHI's little off-roader comes in at higher prices than most entry level products being offered by its opposition.

But the company says this is justified by higher standard equipment levels than its opposition.

Mitsubishi also says the iO steals the march on all competitors by offering a more versatile drivetrain that offers two appealing features: the driver can decide whether the iO should be a constant two-wheel drive or a constant four-wheel drive, via the same "Super Select" system used in the larger Pajero models.

This system operates through a centre viscous coupling that distributes torque between front and rear wheels as appropriate.

The driver can have this operating full-time or have the iO merely driving through two rear wheels like a conventional, part-time 4WD.

The iO also scores with its use of a dual-range gearbox which helps provide "proper" off-road ability.

This feature is used on rivals such as the Suzuki Grand Vitara and Kia Sportage but neither has the full-time 4WD facility of the iO.

All this, according to Mitsubishi, helps justify its punt on pricing the iO at the upper end of the mini-4WD scale.

Available in two models - the entry level three-door short-wheelbase and the longer wheelbase five-door that resides around the $30,000 mark - the iO still tends to stretch the perception of how much a mini four-cylinder 4WD costs.

Automatic transmission is not available in the three-door and adds $2000 to the five-door's price.

For the money, potential buyers are looking at a compact 4WD somewhere around the same dimensions as a Kia Sportage but with the benefit of Mitsubishi's reputation in the off-road sector.

It is a scaled-down Pajero in many ways, with an independent front suspension and a five-link live rear axle doing the work of keeping it firmly planted on or off the road.

Both models offer a split-fold rear seat and a rear storage area accessed via a swing-out rear door from which hangs the spare wheel.

On the shorter wheelbase three-door, rear legroom is very tight - and only a little less tight on the five-door.

But entry and exit are easier than large 4WDs because the overall height is significantly lower.

The three-door also misses out on the bigger 86kW, 1.8-litre engine - familiar in Lancer models - but its twin camshaft, multi-valve, 1.6-litre unit is all new and does a competent job of propelling the slightly lighter body.

It produces a decent 75kW at 6000rpm with 135Nm of torque at 3500rpm, compared to the 1.8's 86kW at 5000rpm and 165Nm at 4000rpm.

At highway speeds the 1.6 is using a good deal of those rpms, although it is smooth and quiet enough not to worry the driver about how long it might be able to withstand the treatment.

But even the 1.8-litre is best described as adequate, rather than spirited on the road.

In automatic form, the iO really needs to be pushed along by the driver in order to make any real progress.

Compensation can be found in the fuel economy. The three-door claims a city/highway split of 9.0L/100km and 6.6L/100km while the five-door returns 10.5L/100km and 7.8L/100km.

Intriguingly, according to official AS2077 figures, the auto 1.8 actually returns better fuel figures than the manual.

On the road, the iO goes about its business competently, even if the steering is a little too light and too low-geared to provide a satisfactory feel.

It is certainly no crisp-handling mini-4WD like a RAV4, but then again it is actually capable of performing in the bush.

That said, the iO acquits itself nicely with on-the-fly selectable 4WD that allows the driver to choose whether it is necessary to run in full-time or part-time 4WD.

The iO is probably halfway between the RAV4 and the Kia Sportage in ability.

The ride on long-wheelbase four-door versions is reasonably absorbing but the two-door tends to bounce around and imparts the feeling it is on tip-toes when pushed into a corner.

The four-door is better but feels quite upright and as a result at times is not particularly reassuring, while the ride quality is still nothing special.

Where the iO makes up ground in the pricing arena is the list of standard equipment.

Both models come with alloy road wheels, air-conditioning, electrically-operated windows and external rear view mirrors, power steering and a driver-side airbag as standard.

The five-door also comes with a standard limited slip rear differential to further improve traction off-road, as well as remote control central locking.

The iO is put together nicely and trimmed to attract younger buyers - particularly the two-door which uses a metallic-looking vinyl in places around the dash and doors to give it a slightly Germanic look.

Perhaps the only real deficit is the fact the mini Pajero fails to stand out in the styling department - an important criteria for the youthful market at which it is aimed.