Toyota GB has two key key goals with the redesigned Yaris – boost sales of upmarket models and sell more automatics, especially ‘inside the M25’, the Greater London area surrounded by the orbital motorway.

European Yaris volume in 2012 is pegged at 200,000 units and TGB, which has enjoyed annual volume of well into the 30s in the past, wants 28,305 (including a chunk of hybrids) , up from 21,695 this year and 22,114 in ’10. It reckons the substantial 2012 boost is achievable, thanks to the redesign and the availability of a hybrid version from sometime next year.

Rival Ford has done rather well in the last few years selling more juicily-specified -and therefore more profitable – versions of its Fiesta and other lines and Toyota figures it can do likewise. So, while the emphasis in the past has been on the volume TR grade (Active in Europe) with 65% of sales, the target now is keep that popular but add volume with the ‘conquest’ grades SR (Style in Europe) and T-Spirit (Lounge).

There will be an entry-level, air con-less T2 grade but that is not seen as being worth much more than 5%, appealing to the value-for-money’ customer.

The B-segment – subcompact in American – is the dominant segment here in Europe and accounts for around 25% of sales, if you’ve seen the narrow streets, tight parking spaces and the CO2-based taxation policies, you’ll already understand why. Competition is fierce – think VW Polo, Opel Corsa, Ford Fiesta, Hyundai i10 and the much-praised, just-redesigned KIA Rio.

With its third generation Yaris, Toyota has rubbed off the quirky and upped the quality perception. The slightly longer, lower, roomier car has lost its cute, bubble-shape, unusual centre-mount instrument pod, and sit-up driving position and gained a bunch of electronic toys, notably ‘Toyota Touch’ which is the automaker’s name for Bluetooth phone compatibility/control, MP3/iPod connectivity, AM/FM/CD and, very usefully, a rear view camera.

GBP500 – or free on launch cars till about the end of the year – adds ‘and Go’ – satnav, better Bluetooth, speed and camera alerts and, with a compatible mobile phone and a non-ruinous data plan, Google local search function linkable to the nav and local info data (parking, petrol, etc.).

Entry level T2 gets you the car with the full set of contemporary safety works and basic niceities, extra in markets like the US, including power mirrors and front windows. TR/Active adds a/c, alloys, Touch, stability and traction control, colour matched door mirrors and some leather interior touches. SR/Style is the ‘sporty one with roof spoiler, front fogs, part-leather seats, rear privacy glass, footwell lights, sports suspension and darkened exterior trim. The top T Spirit/Lounge is the one intended to snare C-segment downsizers not wanting to feel too impoverished – auto lights and wipers, humungeous glass roof with manual shades (a Europe-exclusive item), dual-zone climate, keyless entry and start. This is what we drove and it looked and felt posh.

Toyota is targeting four key types of buyer: the loyal (50%), the aforementioned C-segment downsizer (25%); the rational (40%) and young singles (20%). It all adds up to 135% because there is some overlap.

Another key target in England is automatic buyers which could account for as much as 50% of sales inside the M25. Toyota GB insiders candidly admit they can only now dive fully in here “because we’ve now got a proper automatic”. There was always one available; most other markets could have a 1.5-litre petrol with a four-speed torque converter automatic but Europe, pinned down by CO2-based taxation and an obsession with fuel economy the Americans have only recently discovered, went with automated manual, available with both petrol and diesel. They could be problematic, in generation one days, and are an acquired taste to drive; the more you help by lifting off, the smoother the shift. If you are not mechanically sympathetic, they can be a jerky nightmare, a trade-off for good economy and low emissions.

Now Europe gets a ‘proper’ torque converter auto, with seven manual stages and paddle shifter even. Oddly, the rest of the world gets a new four-speed epicyclic, again, and Toyota is already getting flak for not adding ratios to that. Answer: in a small car, more gears means more ‘hunting’ for the perfect ratio.

Being an automatic fan, probably the only one in the entire UK press corps that trundled over to Copenhagen to try the new line, I found the CVT still has the ‘rubber band’ effect – plant it and the engine shoots to 4000rpm and stays there till the car catches up. Most of the time the revs stay at sensible levels but Denmark is as flat as your hat, as is my part of England, so I suspect it will be a different story on the hills up behind Nice, say. But, on the other hand, the 89bhp 1.3-litre petrol engine’s CO2 emissions of 118g/km are 5g lower than with six-speed manual and combined economy of up to 55.4mpg compares with 52.3.

But the price premium is GBP1,000 and, given the general European small car buyer’s aversion to a helping hand with the gears, I can’t see too many selling outside the M25.

The diesel is also an expensive (GBP1,500) option that many buyers may pause over. Sure, combined mpg is 72.4mpg (officially but not necessarily owner achievable) and CO2s drop to 104 but in the UK payback time could be years. I just drove one through downtown Copenhagen and it’s a nice little motor, torquey, not too grumbly and loafs along flat motorways in sixth gear but Toyota GB is only selling it with TR trim and without the automated manual available on the continent.

Nor will there be stop-and-start, available on the continent. TGB argues the GBP500 delivers such little benefit – 4g of CO2 reduction and three more miles per gallon – that payback is, again, simply too long, about five years.

Officials make no secret they leaving plenty of wiggle room for the upcoming hybrid, which will also be made with the other versions in France and will have class-leading CO2 emissions, the figure of 84g has been mentioned.

The new emphasis on higher-spec models will pose challenges for stock controllers and sales planners in the national sales companies across Europe. When it was TR trim-dominated, they were kept in stock and everything else was built more or less to order. TGB insiders say the ‘push’ system – sell what the factory builds and ships – will still dominate so they’re going to have to be sharper at forecasting. But a hugely favourable reaction to the new auto from a major London retail group should encourage adding a few more autos, and higher specs, to the build mix.

Additional benefit comes downstream. With deferred final payment, personal contract finance a popular (56%) way of buying a Yaris, lots of three year olds hit the market, all with identical specs and limited colours. Harder to resell. Boosting the mix of higher specs and autos will, from 2014, give dealers a wider choice of maker-backed used car stock and that won’t be all bad, either.

Toyota Yaris engineer proud of design, interior quality

Toyota achieves quality perception without cost