Panda that's just a little bit cross

To make their Panda Cross, Fiat's engineers have beefed up the popular 4x4 city car with some rough, tough styling and impressive extra capability to make a beast that's as much at home in the wild as in the streets.

It's a pretty rare beast, too. I've probably killed off some of my few remaining brain cells trying to think of a car which matches it in both areas – ride and refinement on the road and off-road ability that would put some very much more expensive SUVs to shame.

There are a number of small cars with four wheel drive these days, including the standard Panda 4x4, which offer the reassurance of all-wheel drive on winter roads, and are capable of the odd foray onto the beach or field. But the Panda Cross is designed to tackle much rougher terrain when needed, and to prove the point Fiat let Britain's motoring writers loose in the woods of a country estate and a muddy, flooded quarry – both of which the car took in its stride.

It shares the same small, economical engines as the standard Panda, but its secret is light weight, increased ground clearance, a redesigned front and rear end to allow it to tackle steeper climbs or descents, and steel plates to protect vital components underneath from being damaged by stones and tree stumps.

In the engine bay, the air intakes are positioned considerably higher so you don't 'drown' the engine event in relatively deep water. All-season tyres, a range of electronic aids and a fast-acting, three-mode four-wheel drive system help provide the necessary traction on mud and wet grass.

But of the electronic aid which considerably adds to the Panda Cross's capabilities is hill descent control, a system first seen on Land Rovers and later BMW SUVs but not in cars of this class and price (from just under £16,000). It largely does away with the need for a second, heavy and expensive low-range gear box. Through the ABS system it uses pulses of braking to keep your progress to little more than walking pace down steep slopes without losing grip and 'tobogganing,' out of control to your doom.

As part of the test, the Fiat techies suggested tackling a wet, muddy 45-degree slope in neutral: anathema to someone so used to using low-range first gear to control speed in such circumstances. It was a leap of faith, but I tried it and the car didn't let us down. We crept down the slope perfectly under control as the electronics and hydraulics did all the hard work.

That one system alone makes you so much safer off-road than any of the many competitors who don't have either hill descent control or low-range gears.

At just over 1,000g, light weight means the small engines of 80bhp (diesel) or 85bhp (petrol) are capable on the uphill bits, too. The petrol version has a specially designed six-speed gear box with a 'crawler' first gear, while the diesel relies on its lower revving, torquey character to the same effect.

Light weight and small engines have another benefit, too: fuel economy of 60.1 and 57.6mpg respectively, low emissions and low rates of road tax.

It was a pleasant surprise that all those ingredients of an excellent off-roader – increased ride height, all-season tyres and tough suspension – don't compromise the Panda Cross on the road where it will spend most of its time.

Both engines are quiet at higher road speeds and the ride is as smooth and compliant as you'd expect of a modern city car, with no hint of the old off-roader 'rock and roll' to make your passengers car sick.

Cornering appears unaffected, too, and of course you have electronic stability control and the automatic four-wheel drive to give you extra security.

The Cross is, of course, virtually identical in size to its Panda stablemates, except when it comes to height thanks largely to the bigger, 15-inch alloys and special tyres. The cabin is tall, too, with big areas of glass and you immediately feel the higher seating position which leaves you looking down on most hatchback drivers.

Like its stablemates, the Panda Cross seats four in comfort and there's 225 litres of boot space, increasing to 870 litres with the rear seats folded.

Traction control, stability control, hill descent control, three-mode terrain control and diff lock are standard on both Panda Cross models. Other standard equipment is pretty comprehensive, too, with climate control, electric windows and door mirrors, an audio system with Bluetooth, split/fold rear seats, and a leather steering wheel with remote controls included.

Prices start at £15,945 for the version powered by the 875cc Twin Air petrol engine, already familiar to Fiat 500 drivers among others.

With 85bhp on tap, it tackles the 0 to 62mph dash in 12 seconds and is capable of averaging up to 57.6mpg (65.7mpg on a run) with CO2 emissions of just 114g/km. The 1.3 litre multijet diesel version costs £1,000 more, and is a little more economical, averaging 60.1mpg.

With the cheaper Panda 4x4 already proving popular and a brand new 500X version on its way, Fiat has relatively modest ambitions for sales of the Panda Cross.

But in its favour it has the capability to deliver for owners who want to go further than the park or the out-of-town shopping centre at weekends, and the chunky, distinctive styling which should appeal to the 'active lifestyle' owner who might need its talents.

And in a world where car makers are constantly looking for new niche markets the Panda Cross is out there pretty much on its own: a relatively cheap 4x4 to run with both serious off-road ability and civilised city manners.

By John Griffiths