Make no mistake – this little Toyota is not a red-blooded hot hatchback. Even though it has a sizeable 1.8-litre powerplant under its bonnet, the Yaris SR bridges the gap between a pedestrian supermini and a fire-breathing performance model. And while the Toyota’s chassis does benefit from the sporty tweaks, it will still leave many enthusiastic drivers wanting more. Nevertheless, it’s entertaining to drive along a country lane and offers greater refinement than many rivals.

Fun, feisty and affordable, Toyota’s original Yaris T Sport was one of the great low-power, high-thrill hot hat-ches of the Nineties. But things have moved on, and most manufacturers agree that supermini-based performance models now require upwards of 180bhp to compete.

Toyota, though, thinks otherwise, and its latest racy baby does without a headline-grabbing power output. Producing a mere 131bhp, the new Yaris SR is a lightweight in this class of the market – instead, it delivers knockout punches for low running costs and affordable prices. However, this modest muscle is not the only big gamble Toyota is taking with the car. Having phased out the T Sport badge in the UK, the Japanese maker is calling the latest top-of-the-range Yaris the SR, a name that hardly has the same verbal punch...

At its heart lies a brand new 1.8-litre powerplant, which uses Toyota’s latest Dual VVT-i technology to adjust both intake and exhaust valve timing to maximise efficiency. The result is impressive fuel economy of 39.2mpg on the combined cycle, plus CO2 emissions of 170g/km.

On the road, this engine instantly seems to be lacking in character. The exhaust makes a typical Toyota drone rather than a satisfying rasp, and the motor can feel weak at low revs.

Peak torque of 173bhp doesn’t arrive until 4,400rpm, when the motor comes alive and revs keenly to more than 6,000rpm. As with the 1.5-litre T Sport that went before it, the SR isn’t at its best on the motorway, as the five-speed transmission doesn’t have a tall cruising ratio.

On-paper performance is reasonable, though, with the 0-60mph sprint dispatched in 9.3 seconds on the way to a top speed of 121mph. In reality, the Yaris is swift and punchy, although you do notice every one of the horsepower that it gives up to today’s hot hatch class leaders.

As well as adding a new engine, Toyota has fettled the Yaris’s chassis set-up. The SR rides 8mm lower than lesser models, while the suspension is also stiffer. Despite these tweaks, the car still offers a comfortable and compliant ride, while its dynamic abilities are brought into focus. It’s not as nimble as the Ford Fiesta, but the SR turns into bends with enthusiasm and adjusts its cornering line neatly if you lift off the accelerator. Ultimately, the nose is still keen to push wide if you carry a bit too much speed into a bend, but the standard-fit stability control – which cannot be disabled – helps to bring it back in line.

Engineers have also worked on the electric power-steering system, reducing the number of turns lock-to-lock to increase responsiveness. Yet while the changes are welcome, there’s still an artificial feel through the wheel – in this respect, the Toyota is put to shame by the likes of Peugeot’s 207.

Priced at £12,995, the three-door SR is pitched with a comfortable gap between itself and the big hitters in the hot hatch class – the Vauxhall Corsa VXR costs £15,595 and the Renaultsport Clio 197 is £15,995. Pay an extra £500 and you can have the newcomer with the practicality of five doors. This seems good value until you look at Suzuki’s £11,499 Swift Sport, which is arguably more fun to drive.

Toyota is proudly proclaiming the SR as “the best Yaris ever”. We don’t think it quite matches the grin-factor of the old T Sport, but the newcomer still represents a strong, mature and practical overall package.