It's a serious business, this testing of new cars, but it can sometimes be difficult to remain firm of jaw and steely of eye. Like when friends ask what the car is - and on being told, crack up laughing.

Such was the case with Mitsubishi's Pajero iO.

It's Italian for "me", and pronounced "ee-oh". Which led a few too many people on hearing its name to burst into song with the chorus from Old MacDonald Had A Farm...

But it's no joke. This little brother to Pajero is a new contender in the small 4WD wagon market, the fastest growing of all 4x4 segments (up 360 percent over the last four years).

There can be no doubt that this is hotly contested territory, with RAV4, Holden Frontera, LandRover Freelander, Honda CR-V, Subaru Forester and Suzuki Vitara all jostling for space already.

Introduced in Japan 12 months ago, iO has been selling more than double the figures of any of its  competitors, so there must be more to it than a funny name.

Unlike its medium 4WD sibling the Challenger, which is based on the rear leaf-spring chassis of the Triton ute, iO was designed from the ground up in pursuit of passenger car comfort.

It accordingly consists of a monocoque, or unitary body construction, with all-coil suspension. The rear axle is rigid so it's still not fully independent, but the 5-link layout chosen is one of the better solutions to ride comfort and handling with a live rear axle.

Our drive was in the 1.8 litre 5-door, whose resemblance to big-brother Pajero makes the size comparison even more marked. Which makes first impressions of iO's interior even more pronounced as it is surprisingly spacious, with an airy feel accentuated by abundant shoulder and elbow room.

There's no tilt adjustment on the steering wheel, which was no inconvenience to me but might irk shorter drivers wanting the wheel to sit a bit lower. And drinking while you drive is apparently frowned upon as there are no drink-holders to be found (okay, they're not essential to existence,  but are a convenience found in most of today's cars).

But iO is otherwise fairly well equipped, right down to its one-touch windscreen wipers.

Air conditioning is standard in both models, along with power windows and mirrors, a cd-compatible radio/cassette stereo, alloy wheels, height adjustable driving seat and driver's airbag, long delay interior light, an immobiliser and remote central locking. Since we're hovering around $30k here, this is sounding good.

And being a wagon means easily accessible cargo space, with a high-opening tailgate and bumper level doorsill. It doesn't fare too badly for legroom either, providing reasonable comfort for taller occupants in the front seats, though rear passengers might feel a bit squeezed if the front seats are pushed right back.

It's in the mechanicals department that iO sets itself apart as a "real" 4WD, because it boasts part-time 4WD with a high/low transfer case, and makes no secret of the gadgetry inherited with its Pajero bloodline, particularly the SuperSelect transmission.

Described as a "lightweight version" of big brother's, it has one notable difference. In 4H the transmission delivers torque on demand to the front wheels, up to 50:50, via a viscous coupling. Not quite the direct achiever that the full sized Pajero's version is, but still allowing the shift from 2H to 4H at up to 100kmh, and from 4H back to 2H at any speed.

If you buy an iO and never take it off the bitumen, that's unlikely to be of more than academic interest. But we took off for a bit of half-serious offroading and found that the new kid with the funny name can mix it with the big kids in the bush.

Venturing first onto soft beach sand, with tyres still running at road pressures, quickly revealed that iO is capable of matching even Suzuki's `unboggable' reputation - at 1330 kilos in automatic version, 5-door iO is a bit lighter than the comparable 2.0 litre Grand Vitara that weighs in at 1375kg.

Even after the tyres had gouged themselves into the sand, iO continued on with all of its 1800cc working with a will. The adapatability of the auto trans made it almost seem unnecessary to reduce the tyre pressures, but I did so anyway just for the fun of it.

This made the little Mitsubishi as near as dammit to unboggable in the truest sense of the word, cruising over deep sand instead of through it, and the vertical travel of the suspension allowed it to navigate some fairly daunting mounds and hollows.

It has a reasonable 205mm ground clearance, with approach and departure angles on the 5-door that are also generously steep - 33 degrees approach and 38 degrees departure.

iO acquitted itself with equal prowess on rutted stony hill tracks, followed by some of the dreaded `slippery black sand' of the coastal plain, and on gravel roads the SuperSelect allowed us to play silly games of switching back and forth from 2H to 4H. No real reason - but ooh, isn't this fun!

And just in case you get really serious, the passenger compartment and exterior lighting fixtures are described by Mitsubishi as having designed-in "water-resistant measures" for safer river crossings!

Back on the bitumen, we were reminded just why rear-drive has such a large number of devotees for its on-road feel.

While iO should not be confused with a sportscar, it can still be hustled vigorously through twisty bits with an assuredness that was often quite surprising.

Its modest weight seems fairly evenly distributed, and iO exhibits commendably neutral handling in tighter corners, with any tendency towards rear-drive oversteer probably more imagined than experienced (there's not enough power on hand to break the tyres loose, so stop it or you'll go blind!)

But while Pajeros are popular for trekking north for the winter, towing a 20-foot boat or luxury caravan, the 1.6 and 1.8 litre fours fitted to iO are a bit short on power and torque to be ideal for that job.

And yet it's in the power/torque department that the word `sportscar' irresistably rises into the conscious yet again.

While iO is no thumping powerhouse on wheels, its little 1.8 litre engine reaches maximum power of 86kW at 5500rpm and peak torque of 165Nm at 4000. At 110kmh, in 3^rd gear auto, the slightly short gearing sees it spinning at a busy 4300rpm - engage overdrive fourth and the tacho relaxes back to 3250.

How convenient that its best performance occurs at around the legal open road limits of most Australian states. And so willingly that the little wagon thrives on it!

Fuel consumption averaged out at 11.9 l/100km (24mpg) during test, which included our semi-serious offroad excursions. This indicates that iO is capable of returning more than healthy consumption figures in the urban transport role it seems destined for (and perhaps with a right foot lighter than mine…).

Like the vast majority of 4WDs bought nowadays, particularly the smaller versions, iO is likely to spend most (if not all) of its life on bitumen as an urban transport runabout. And in its hotly contested market segment, this quaintly named newcomer could make the existing competitors a bit uneasy.

It couldn't be recommended for towing the cabin cruiser, but iO can be fun to drive, and offers user-friendliness and city-savvy the equal of its competitors. And if you do decide to head off into the great unknown, Pajero iO has what it takes to get you there - and back.