Mercedes has entered the small SUV/crossover segment with its new GLA, which is designed to take on the Audi Q3 and BMW X1.

This 170hp GLA220 CDI, only offered as an automatic, is predicted to be the biggest-selling model, although the GLA200 CDI gets down to 119g/km in manual form and with two-wheel drive, compared with its more powerful four-wheel driven sibling’s 132g/km.

The manual also gives the GLA its sub-£26,000 entry point (the seven-speed auto is another £1550), while stepping up from 200 auto to the GLA220 is a hefty £2730. More reasonable is the £1000 step from SE to AMG Line trim, with the visual adornments inside and out making a positive difference to the already good-looking GLA. It’s much more squat and lower than the Q3 and X1, which impacts upon rear visibility with the small rear window, but it is the best-looking of the trio, and an improvement over the A-class.

That, though, comes at a significant cost: the smaller A-class on which the GLA is based is more than £3000 cheaper for the same spec. The GLA is the same width as the A-class – and just 61mm taller and 125mm longer – although the boot is 140 litres larger at 481 litres, which outpoints BMW and Audi by a hefty 61 litres.

The GLA handles nicely, and is probably the Merc model closest to its BMW rival for driving pleasure. The ride is hard on the larger AMG-spec wheel, but not as bad as its German competitors, and the transmission shifts seamlessly between cogs. The biggest let down is the engine refinement, with plenty of noise entering the cabin. But progress is rapid enough for a car that’s unlikely to be bought with performance as the prime driver.

It’s with costs, though, that the GLA really surprises, being 1.7p per mile cheaper than the equivalent Audi Q3 in this top-spec and automatic four-wheel drive form, while the X1 is 6.5p behind, thanks largely to the CO2 difference of 132g/km for Mercedes versus Audi’s 156g/km and 159g/km from BMW.

For those willing to pay for a car that’s larger/more practical than a premium hatch, the GLA is an attractive choic