If Subaru Australia gets the pricing anywhere near right, it could very well have another SUV success story on its hands in the all-new Subaru XV.

The Subaru XV goes on sale in Australia in the first week of 2012, sporting a chunky, high-riding body, a refined and well-appointed cabin and a range of new powertrain technologies designed to dramatically increase efficiency.

If the base model Subaru XV is priced below $30,000 (and this is a strong possibility, given the outgoing Impreza XV started at $27,490), it will have a significant price advantage over its direct all-wheel drive competitors: the Hyundai ix35 ($31,990), Mitsubishi ASX ($31,990) and the Nissan Dualis ($31,890). Pricing details will be finalised closer to the vehicle's Australian launch.

Despite being based on the fourth-generation Impreza hatch and sharing its drivetrains, some exterior panels and cabin layout, the all-new Subaru XV has officially broken away from the Impreza range to become a crossover in its own right.

The XV will officially sit in the compact SUV segment in Australia alongside its bigger brothers: the Liberty wagon-based Outback and the conventional four-wheel drive-styled Forester.

The current Impreza XV has been averaging around 70 sales per month, but Subaru Australia managing director Nick Senior expects a substantial increase in local XV sales when the new model arrives in January.

Mr Senior says Subaru Australia is targeting 400 to 500 monthly sales for the new model - a massive goal that would mean approximately one XV would be sold for every two Imprezas.

It's a bold prediction, but one Subaru Australia is confident it can achieve without sabotaging other models.

Mr Senior said the impact on Forester sales would be minimal, as the brand believes the small XV will attract a younger customer base. He also said Subaru historically experienced little crossover in SUV customers and passenger-car customers, suggesting XV was unlikely to rob Impreza of too many sales either.

But after spending time behind the wheel of both cars at Fuji Heavy Industries' private test facility in Japan, we think there will be plenty of Impreza shoppers keen to test out the XV. So the obvious question is: just how different is the XV from the new Impreza?

Compared with the new Impreza five-door hatch, the XV has an extra 75mm of ground clearance (220mm). Despite this, Subaru has kept the height down to 1615mm - strengthening its assertion that the XV has a lower centre of gravity than its compact SUV competitors.

The XV is 40mm wider and 35mm longer than the Impreza hatch, although its wheelbase is 10mm shorter, technically robbing it of some interior space, although the difference is imperceptible.

The XV's boot is 30 litres smaller than the hatch's (310 litres vs 340 litres), as Subaru Australia has fitted a larger spare tyre at the request of potential customers. It's still not quite full-sized, but it's much wider than a conventional space saver, which means it will be capable of being driven at high speeds and used while towing.

The result is a rather shallow-looking boot, although Subaru's engineers demonstrated its capacity by loading a pram in with minimal fuss (minimal after they figured out how to fold the damn thing anyway). Those who need extra volume can fold the rear seats forward to open up a generous 1200-litre cargo space.

From the outside, the Subaru XV gets a unique grille and front and rear bumper design. The black plastic cladding around the wheel arches and lower panel edges is perhaps the most distinctive feature, along with the dramatic 17-inch black/silver alloys (standard on all grades) and the exclusive 'tangerine pearl' paint colour.

The XV has a proper rough-and-ready look about it, giving it more character than the conventional Impreza, which a number of you have already told us is a little bland.

Subaru Australia says the XV will be a more premium offering than the Impreza, with prices and specifications to match its higher pegging. Like the all-new Impreza, the XV will be offered in three specification levels: 2.0i, 2.0i-L (luxury) and 2.0i-S (sports).

Every XV will come standard with a 4.3-inch Multi-Function Display vehicle information colour screen and reversing camera, as well as seven airbags (dual front, side, curtain, and driver's knee), steering wheel-mounted paddle shifters for the CVT variants, and Bluetooth phone connectivity and audio streaming.

The 2.0i-L will get a sunroof, satellite navigation with SMS voice-to-text and voice command, dual-zone climate control, leatherette seat trim, and rear privacy glass.

The 2.0i-S tops the line-up with proper leather upholstery, eight-way electric driver's seat, heated front seats, alloy pedals, HID xenon headlights and silver roof rails.

The feel in the cabin is similar to the Impreza. It's a highly spacious interior with plenty of room for the feet and knees of taller rear-seat passengers. It's also come a long way in terms of refinement compared with the old Impreza XV. Soft-touch plastics are used across the dashboard, and most of the switches and dials have a high quality feel. The new Impreza is among the quietest cars in its class thanks to a smooth drivetrain and excellent noise suppression, and the XV is just as impressive, perhaps more so against its SUV competitors.

You can detect a subtle difference in ride height when you jump from the Impreza to the XV, but the overwhelming sensation is that you're driving a small hatch rather than an SUV. Visibility remains excellent to both the front and rear thanks to thin pillars and large windows.

The Subaru XV shares its mechanical underpinnings with the Impreza, meaning it scores the same brand-new engine and transmission technology. Despite producing identical power and torque figures, the XV's 110kW/196Nm 2.0-litre horizontally opposed Boxer engine is lighter and more efficient than the old model. It can be teamed with either a six-speed manual or continuously variable transmission (CVT) - these options replace a rather industrial-feeling five-speed manual and a dated four-speed auto.

The new drivetrain is considerably more efficient than the old Impreza XV, thanks in part to the addition of Auto Start Stop technology as standard throughout the range - a first for a compact SUV in Australia.

The manual returns combined cycle fuel consumption of 7.3 litres/100km, while the CVT is more frugal at 7.0 litres/100km. The previous model used 9.3 litres/100km with either transmission. Both variants use 0.2 litres/100km more than their Impreza counterparts, however the XV's larger fuel tank (60 litres vs 55 litres) means it has a greater potential driving range (857km vs 809km). The XV can also pull an extra 200kg, with a total towing capacity of 1400kg, regardless of transmission.

Like the new Impreza, there are no plans at this stage to add a diesel engine to the XV range, regardless of how well the technology might suit the application.

Mr Senior said a diesel engine for the compact SUV was on Subaru Australia's wish list, but admitted it was not a priority at the moment and far from the top of the brand's wish list.

The XV's taller height means it doesn't quite match the Impreza's tight handling, but it still feels like a small car from behind the wheel. During our short preview drive, it lapped up the bumps with a similar degree of ease to the Impreza and maintained its flat, hunkered-down feel through corners. Unfortunately, we didn't have the opportunity to take the XV off-road, but we will put it through its paces in January to see exactly what it's capable of.

The steering has a reassuring weight to it, although the electric system inhibits the transference of some road feel. The pedals are well spaced and have a good feel, with a short travel on the clutch and a progressive brake application.

Much like the Impreza, the CVT variants produce a whiny acceleration note, but that largely dissipates when you settle on a cruising speed. Keep in mind, the CVT was primarily designed to be efficient rather than enjoyable. Subaru has tried to liven up the package with paddle shifters that select between six pre-determined 'gears', but it doesn't give you anything like the same sensation as driving a semi-automatic transmission.

The manual gearbox rewards you with the conventional engine rise and fall, and lets you appreciate the character and nuances of the all-new Boxer, which has a seductively metallic rush as the revs rise. I found the manual shifter a bit fiddly and the gears a little too tightly spaced, although more time behind the wheel would likely resolve any deficiencies that weren't intuitively mastered.

Subaru says the all-new XV crossover is the embodiment of its 'fun to drive' philosophy. While we're yet to truly put this to the test, our early impression is that it could actually be more 'fun to own'. The drivetrains don't provide that natural burst of enthusiasm and acceleration, however the XV feels very car-like behind the wheel while providing a practical off-road-ready ride height. It's anything but a bush-basher inside, with more standard equipment than the Impreza and equal levels of quality and refinement. Team all that with its youthful, chunky styling and the Subaru XV is a comprehensive package that - if priced well - should become a serious player in the entry-level compact SUV market.

Source: Car Advice