We'll be blunt; we haven't given much love to the Toyota Echo, a car that was non-affectionately dubbed "The Clown Car" by this writer. Its tall roof and pudgy body made us think a dozen goofballs with frizzy orange hair and jumbo shoes would spill out when the doors opened. Mediocre cabin trim and shaky handling didn't help either.

Now comes the Echo's overdue replacement, the 2007 Toyota Yaris. With the new Yaris (yes, the name Echo is gone), Toyota steps things up in every way. Rather than having the two-door liftback and four-door essentially differing only in body style, two separate teams developed each version of the Yaris, giving them different personalities.

Aww, isn't it cute?
Look at the Liftback and you can't help but smile at its cuteness. It reminded us a little of the Yaris' cousin, the Scion xA, a car that one editor referred to as looking like "a big-headed toddler." Look at those big eyes and that happy face. Although shorter than the outgoing Echo coupe, the Yaris Liftback has a wheelbase over 3 inches longer (96.9 inches vs. 93.3 inches).

The four-door aims for a mini sport sedan look and is now longer (169.3 inches vs. 164.6 inches), lower (56.7 inches vs. 59.1 inches) and wider (66.5 inches vs. 65.4 inches), which relieves it of the comic proportions of the Echo sedan. As with the Liftback, the sedan's wheelbase was also stretched (100.4 inches vs. 93.3 inches). The net result is a handsome little sedan that doesn't scream "entry-level" like the Echo.

With a coefficient of drag of just 0.29, both the sedan and Liftback slip through the air with ease, promising a quieter ride and greater fuel economy at freeway speeds.

Fraternal, not identical twins
So different are the two Yaris models that they don't even share dash panels. The Liftback has three gloveboxes — two on the passenger side and one on the driver side, a benefit of the center-mounted instruments. To optimize passenger and legroom, the Liftback also features reclining rear seats that slide nearly 6 inches fore and aft.

The sedan's cabin has a more upscale feel with features like "Optitron" illuminated gauges, a two-tone color treatment, height-adjustable front seats and, on the LE, a 60/40-split rear seat with a fold-down center armrest.

Both Yaris body styles can be had in either base CE or fancier LE trim levels. The CE comes with air-conditioning, a tilt steering wheel, intermittent wipers and dual vanity mirrors. Move up to the LE and an AM/FM/CD system (with an MP3 audio jack), rear defroster, 60/40-split rear seat and 15-inch wheels (replacing the 14s) are added. Optional in both Yarii are a convenience package (includes power windows, locks and mirrors; cruise control; and antilock brakes), and side and side curtain airbags. The sedan is also available in an S version, essentially a package for the LE sedan that adds lower body skirting and an "S" badge.

Smooth as a sewing machine
Both models are powered by the same 1.5-liter, 16-valve inline four that's used in the Scion xA and xB models. Equipped with variable valve timing (VVT-i), this engine makes 106 hp at 6,000 rpm and 103 pound-feet of torque at 4,200 rpm. It's mated with either a five-speed manual or four-speed automatic gearbox, but the EPA says it gets about the same mileage with either — 34 city/40 highway for the manual and 34/39 for the automatic.

We sampled both powertrains, and found the manual gave the Yaris a peppy, sporty feel. The engine stays smooth and vibration-free, even at high rpm. We took the engine to redline again and again and never felt like we were thrashing the car. Both the gearshift and clutch action are light and the gearshift **** doesn't vibrate, whether at idle or while running at 75 mph on the freeway.

As expected, the automatic sapped some of the fun, as off-the-line performance is blunted. But like the manual, it has decent midrange pull and has no problem getting up to and cruising at 75-80 mph on the highway.

We laid into the brakes hard a few times from around 55 mph and found an easily modulated pedal with reassuring braking power. All Yarii have disc brakes in the front and drum brakes in the rear, but the cars we drove had the optional ABS.

At highway speeds we noticed a difference between the Liftback and the LE sedan. The sedan was quieter while the Liftback let more road rumble into the cabin. Both absorbed freeway expansion joints without drama, adding to the relaxed demeanor at cruising speeds.

Well-sorted suspension
With the suspension stiffened by 47 percent over the Echo, the Yaris feels buttoned-down and dare we say fun on curvy roads. The suspension design is nothing earth-shattering — tried-and-true MacPherson struts up front and a torsion beam out back. But with redesigned bushings, a single upper mounting point for the front struts (rather than three as in the Echo), the firmer calibrations and a lower center of gravity, the Yaris doesn't even feel related to its wallowing forebear. There's no slop in the Yaris' handling and the revamped suspension and longer wheelbases provide a smoother ride.

Helping to optimize fuel-efficiency is the electric power steering setup that takes away the engine-driven hydraulic pump of traditional power steering systems. Unlike some other systems of this kind, the Yaris' has a natural, crisp feel with even weighting.

Just in time…
As good as it is, the 2007 Toyota Yaris (which goes on sale in April 2006) will be facing some strong competition. Firm pricing was not yet available as of press time, but Toyota execs indicated that it will start under $13,000. With the recently introduced and well-built 2006 Kia Rio and Hyundai Accent and forthcoming 2007 Honda Fit and Nissan Versa, Toyota has replaced the Echo just in time. With a healthy dose of upgrades in style, handling and refinement, the Yaris puts Toyota in good standing for the upcoming economy car war.