Part of the reason the Nissan Versa delivers good fuel economy is due to the use of the Xtronic continuously variable transmission, or CVT. Nissan first used this system in the Murano where it was so well integrated that some drivers never noticed it was anything other than a regular automatic.

That's not to say a CVT is not as good as a conventional transmission, but it is different. It delivers a much smoother drive as there are no gears or inefficient hydraulics involved. Instead, a series of belts are used to vary the drive ratio between the engine and the drive train. It works more efficiently than a traditional automatic, which is why the Versa equipped with a CVT delivers the best highway mileage. Around town it even has the same economy as one with a manual transmission.

Incidentally, although Nissan is offering a regular four-speed automatic transmission it intends to drop that in favor of just the CVT in the near future. Naturally, it will continue to offer a six-speed manual transmission for those who enjoy shifting.

As Nissan intends the CVT Versa to be the most popular model in the range that is the one we spent time driving. From the word go we were pleased with our experience in the car. It had plenty of zip and there was no problem merging into traffic on a fast free-flowing freeway. When you stomp on the gas pedal the sound of the engine revving instantly before the car accelerates can be a bit disconcerting to some. We found it not unpleasant, in fact it sounds kind of fun. Of course in regular stop-and-go traffic under slow acceleration there is no sensation other than the car moving forward smoothly with no sound or feel of shifting gears. It's certainly a far cry from the notch gear shifting that used to be all too common on small four-cylinder cars with automatics.

On winding roads in Tennessee, near where Nissan is building its new U.S. headquarters, we found the car's handling to be perfectly adequate. It's not sporty like a Mini Cooper, nor is it sloppy like budget cars of a few years ago. Sporty drivers might wish for more feedback from the steering and more power, but there's no reason for others to complain.

The Versa is one of the first cars in this price category to feature electric power steering. In the past we have been disappointed in the poor feel of electric steering but Nissan seems to have designed this system so it feels just as good as any hydraulically powered steering. No complaints here.

Thanks to the long wheelbase with wheels pushed out toward the four corners, the ride is better than one usually expects from a small car. Brakes are fine but again don't expect to race this car through a slalom. It wouldn't take much, though, for Nissan to upgrade components and produce a truly sporty version as the fundamental basics for a decent performance car are all there.