The Mercedes-Benz B-Class has never been quite the success story the German luxury car maker hoped for, but it’s never been more significant than this third-generation model.

While previous versions of the compact Benz sat on an innovative but inflexible platform, the latest model sits on all-new architecture that will herald the arrival of an expanded range of mini-Mercs.

It’s part of the company’s aggressive new strategy to grow sales by targeting more younger buyers – a demographic the previous B-Class (and twin A-Class) struggled to attract.

The real volume star of this small-vehicle fleet will be the new A-Class that reaches Australia in early 2013 in hatchback form for the first time, though for now the new Mercedes-Benz B-Class offers some insight into what we can expect from the new A-Class and the forthcoming CLA four-door ‘coupe’, baby SUV and compact sports car.

It may be all change underneath, but the new B-Class’s styling has clearly evolved from the MPV-like shape of its predecessors. That should help to maintain the noteworthy popularity the B-Class achieved locally in 2011, though there’s a suitably modernised and sharper look that includes dramatic creases on the flanks that are reminiscent of Chris Bangle’s flame-surfaced, first-generation BMW Z4.

There’s less of a connection with the past inside, which is great news for new B-Class owners. There’s a vast improvement to the cabin that ensures the compact model has a similar sense of quality and sophistication to bigger Mercs.

Put aside some minor niggles that detract slightly from the overall perception of quality, such as the row of circular air vents that are inspired by those in the SLS AMG Gullwing but look cheap and the hard plastics used for the medium and lower levels, and the B-Class is a fine place to sit whether you’re driver or passenger.

The upper section of the dash exudes a much higher level of quality, and most of the switches and dials depress and rotate with a satisfactory feel.

Apple’s global domination continues its spread into the car industry with the Mercedes-Benz B-Class featuring an iPad-style information screen on top of the dash (and fixed with no Audi-like option to stow it away at the touch of a button).

As a genuine family car option, there’s an abundance of storage options that include a decent-sized (and nicely damped) glovebox, under-seat compartment boxes up front, padded door bins and – thanks to the B-Class’s gearlever stalk and dash-placed electronic park brake – a range of compartments, cupholders and addition storage bin on the centre console.

There’s still room for the rotary dial that controls navigation of the B-Class’s Comand infotainment system, though as with other Mercedes models it’s a system that seems to require more convoluted actions to access/perform functions, and generally feels a generation behind, when comparing rival systems from Audi (MMI) and BMW (iDrive).

The 14.7-inch colour display, though, is standard on all three variants in the Mercedes-Benz B-Class range, which currently comprises the $38,950 B180, $43,950 B200 and, the car we’re specifically testing, the $43,950 B200 CDI.

[Click if you want to read our Mercedes-Benz B-Class review featuring the petrol models.]

Key comfort/fancy features for each include multi-function steering wheel, Bluetooth phone connectivity and audio streaming, rain-sensing wipers, automatic climate control, multi-function trip computer, ambient lighting, parking sensors, foglights, LED daytime running lights.

Key safety features encompass the likes of nine airbags, electronic stability control, hill-start assist, attention assist, tyre pressure monitoring and Benz’s Pre-Safe system that will tighten seatbelts (something that also occurs automatically when you first click in and always feels weird), adjust seat positions and close windows and the sunroof if necessary if the car’s electronic systems detect an imminent accident.

And for those buyers who place safety at the top of their wish-list, then the Mercedes-Benz B-Class came within a whisker of achieving a perfect score in independent crash testing by ANCAP.

The B200 models add extras such as lumbar adjustment, auto-dimming rear-view and side mirrors, artificial leather upholstery, chrome interior touches, bigger (17-inch) alloy wheels and a (beautiful to grip) leather-wrapped steering wheel.

Our test car included three of six available option packages, which – for prices ranging from $1490 to $2990 – group various add-ons including reversing camera, a terrific-sounding Harman Kardon audio, heated seats, sports suspension, and panoramic sunroof.

The latter looks more like a twin sunroof than a full-length version from inside and features blinds rather than usual roof-material-matching covers.

That still brings more light into the back seat where there’s generous (but not overly generous) legroom, a huge amount of space for feet under the front seats, and good headroom even for six-footers.

A centre armrest folds down to reveal a ski port and two nicely damped (more fine attention to detail from Benz) push-out cupholders. There are also central vents pumping air into the rear accommodation.

The front seatbacks also feature folding picnic mini tables, though the stiff flipping action suggests they may be vulnerable to any over-enthusiastic by the youngest members of the family.

But back to the all-important driver’s chair. And that seat is slightly lower than before but higher than your typical hatchback – a hip point that appealed to buyers of previous B-Classes.

This writer wouldn’t describe it as the most natural-feeling seat to be in, though there’s no denying the excellent all-round vision (though the side mirror glass would benefit from adjusting – electrically – to a wider angle to better reduce the driver’s blind spot).

The B180 and B200 models are powered by a 1.6-litre four-cylinder turbo petrol engine – with 90kW/200Nm and 115kW/250Nm respectively – though our B200 CDI gains momentum via a 1.8-litre four-cylinder turbo diesel.

It splits the petrols on power with a 100kW ouput, though surpasses both for torque with 300Nm.

Produced between 1600 and 3000rpm, that’s enough to give the Mercedes-Benz B200 CDI pleasantly flexible and generous performance, even if the 1.8 isn’t the quietest four-cylinder diesel in the luxury segment and Mercedes quotes only 9.3 seconds for the 0-100km/h sprint.

It’s also fuel efficient, with the new B-Class’s significantly improved economy emphasised by the B200 CDI’s official combined consumption of 4.7L/100km.

With the B-Class on the move, the diesel also makes a brilliant partnership with the new seven-speed dual-clutch auto that swaps cogs in a super-quick and super-smooth fashion.

As with Volkswagen’s rival DSG system, however, the Mercedes dual-clutch auto isn’t so effective in stop-start driving, proving to be both hesitant and jerky.

The rest of the B-Class driving experience is also a mixed affair.

A shortage of suspension compliance sees the B-Class’s body plunging clumsily into potholes and generally struggling to keep the vehicle composed over bumpy city roads. Where surfaces are better, there’s otherwise an enjoyable suppleness to the ride quality.

There’s also a dead feel to the brake pedal, but on the plus side the Mercedes-Benz B-Class handles surprisingly well, aided by quality steering and offering a modicum of entertainment on windier roads and certainly an improvement in this respect over its predecessors.

Even if it’s a package that would welcome some further polish, there’s no doubt the new Mercedes B-Class is a baby Benz that’s more befitting of the three-pointed star on its grille.