Confusing isn't it when it comes to explaining where cars fall by size and brand image into a market sector? The new Mercedes C-Class is one of those. The use of the letter C suggests it is a C-segment compact car. In fact it is a D-segment upper medium vehicle and now probably the leader of the premium' brands in this sector.

Size is always a contentious issue. For cars it's relatively straightforward with city or mini models in the A sector, then superminis forming the B sector, and at the top end we have executive and luxury cars. Then of course we have MPV people carriers, SUVs and 4x4s, the latter two being essentially the same, depending on whether they are lifestyle or workhorses.

Where it gets confusing is in the C and D-segments, lower medium and upper medium in size, and volume' or premium' in branding.

With the blurring of model sector sizing as smaller models get larger, and owners of tax hit company cars now downsizing from a D-segment car to a large C-segment vehicle, no wonder we are confused.

What is clear is that the C and D segments between them account for nearly half of all new cars sold in the UK.

Take for instance the new Mercedes C-Class four-door saloon. It used to be a premium' brand C-segment medium sized car. Not any longer, because the latest models, which went on sale recently, are much larger in size, technically more advanced, have more fuel efficient engines, better performance and better specification at more or less the same prices.

With a body length of 4,581mm, the new C-Class saloon is 55mm longer, 42mm wider and the wheelbase is 45mm longer over its predecessor giving rear seat passengers in particular much improved legroom. It is now a true five-seat, premium-brand executive saloon and looks, in part, like a scaled-down version of the excellent Mercedes S-class.

For the C-Class saloon range there is the choice for four and six cylinder engines, petrol and diesel options and prices start at £22,937 and rise to £35,577.

The new C-Class also offers customers the option of a different style of front grille as a distinguishing feature. In the SE and Elegance body styles the new grille shape, which I do not like, has a bonnet mounted Mercedes star and for the Sport line there is a huge centrally mounted Mercedes star in the grille bars. I think the previous generation C-Class, circa 2000 to 2007, with its elegant low-line bonnet and four eyed-face, referring to the headlights either side of an elegant grille, was much prettier.

Styling apart, I think the new C-Class is a huge improvement in all other areas. The driveability is the biggest improvement. New technology handling, suspension, braking, safety and stability packages have done wonders for the car.

There are too many to mention in detail but their titles will paint the picture for you on how advanced the new C-Class is. Adaptive braking, intelligent lighting, seven airbags, active head restraints, anticipatory occupant protection and agility control are included as standard, or as an option. These are in addition to new suspension and steering systems with cleaner, more powerful engines.

My test car was one of the projected best selling models, the C 220 CDI Sport Saloon costing £28,002 on the road and of course items such as automatic climate control, rain sensing wipers, automatic lights, stability control and electrically-operated windows ands door mirrors are included.

Add in some must-have options as company and business car owners and users do, such as the uprated sound system, satellite navigation, the stunning panoramic sunroof, plus a few more bits and bobs and the total climbed to a hefty £34,982.

The Sport specification has AMG wheels and body kit together with a firmer and lowered suspension. Surprisingly, the sports suspension didn't compromise the ride comfort although the road noise intrusion was higher than expected from the wide low-profile tyres.

Sports models also feature metallic facia inserts and silver dial surrounds and these brighten up a somewhat conservatively-styled interior. The cabin says executive' car but it really doesn't feel that special. It is beautifully put together, but the overall quality is missing.

On the plus side there is really good headroom front and rear, lots of rear legroom and the largest boot in its class. A neat touch is the electrically-operated cover in the facia which slides back to reveal the information display. All the controls are logical, but the foot-operated parking brake is not to my taste.

Whilst the top speed is an impressive 142mph and 0-62mph is covered in just 8.5 seconds, it is the low CO2 figure of 160g/km and combined fuel economy of 47.9mpg that will impress hard taxed company and business car users the most.

For the record, during a week of heavy motorway driving the C 220 CDI hovered between 50 and 55mpg and this only lowered to an overall average of 49.7mpg after prolonged periods of stop-start in town traffic. Very impressive.