I understand why Rover needs the CityRover. The small car market may not produce big profits, but it certainly has the volume. Rover's 25 is a little long in the tooth, and there is a whole raft of new-generation small hatchbacks on sale now, which offer a cheap step onto the new car ownership ladder.

With the realisation that Rover needed to take action, the next decision was how to go about making a new city car. No doubt there were meetings discussing the possibility of resurrecting the old Metro/Rover 100 platform. As I'm sure the engineering team looked into utilising the Rover 25/MG ZR floorpan. I suspect that it was concluded that making an all-new car would cost no more. However, it is no secret that the coffers at Longbridge are not exactly brimming over with Sterling. Or should I say rupee?

Rover took the decision to enlist Tata, an Indian company you will not have heard much about. MG Rover does import small numbers of Tata pick-ups and four-wheel drives, but Tata the company is simply enormous: how does the figure 11.21 billion strike you? That's Tata's revenue last year. In US dollars... Apparently that accounts for 2.4% of India's GDP and 5.1% of all exports from India.

It is quite common for car manufacturers to outsource engineering tasks, and even whole cars, but a week with the CityRover indicates that the relationship between MG Rover and Tata has not been a particularly fruitful one.

Let's start where most buyers will – the brochures and website. The CityRover is good looking. Its face is reminiscent of the cheeky Metro's and the tall, slim shape is in keeping with the latest trend in city car design. 'CityRover' is boldly emblazoned across the back, and the upright rear lights are thoroughly modern. Pictures of the interior show a modern layout, though it is perhaps worrying that the website focuses on the remote tailgate and fuel filler cap as real plus points. A quick look at the specification of the Style model will show you that for a fiver under £8,900 you get air conditioning, two airbags, anti-lock brakes, a CD player, electric windows all round, an alarm and immobiliser, power steering and a few sporty styling features.

Flicking through the specification of cars in the same price bracket should lead the buyer to a shortlist including the Daihatsu Sirion and Daewoo Kalos, which are incredibly close on price, performance and specification. The new Fiat Panda is also worth a look, though it is smaller and slower. It is a lot cheaper too though, and has more street cred. As does the funky Citroen C2, though it is available in 3-door format only. The Honda Jazz is only £100 more than the CityRover. On paper, the Jazz is nowhere near as well equipped, but it is a far better car in every other way. The Suzuki Ignis is another contender.

Ok, now you have your list of cars to test drive, it's time to go to the local Rover dealer to kick the CityRover's tyres. After a quick wander around the exterior, it will be time to sit inside for the first time and play with the switches and knobs. Oh dear. Those glossy photographs didn't convey the low quality feeling in the cabin. The column stalks in particular are way too flimsy. Even the bonnet pull and fuel flap are unpleasant items to use. The large steering wheel is ok, but the alloy-topped gear lever is a little odd. There is a Honda-esque plastic centre console, which is fine, but the Cannon rubber floor mats really detract from the car, no matter how practical they are in reality.

Even on a short test drive you will probably discover some of the problems we had with the CityRover, such as the driving position. I am an average sized male, perhaps slightly below average (stop sniggering at the back), and I could not move the seat far enough away from the pedals. My legs were uncomfortably bent up, yet the steering wheel and gear lever were about right. My partner is probably the size of Rover's target audience, and she instantly hated it. To ensure she could reach the gear lever her right foot was bent backwards at anything other than full throttle. She commented that it reminded her of driving a van. The problem appears to be the position of the pedals. Taking a closer look, the test car's pedals were fitted with 'sporty' alloy covers, which do not appear in the brochure photographs. Number one, they just do not suit this car, but secondly, they add a centimetre to the height of the pedal and reduce the space available for resting your clutch foot. If these are an option, ensure you do not take it up before checking your driving position.

Unfortunately, the driving experience itself is not much better than the driving position. The gearbox whine reminds me of the early '80s Nissan Micra. That car; however, had a better gearchange. Most of the time, the CityRover's change is just vague, and going up the gears is ok, but I found downchanging from 5th to 4th nigh on impossible.

Thankfully the engine is torquey enough not to require changing down very often. Even on the motorway it keeps up with outer-lane traffic admirably. Unfortunately it makes a lot of noise at and above 70 mph. There is apparently a counter-balance for the crankshaft and a hydraulic engine mounting, but it felt as if someone had forgotten to fit these items, such was the resonance through the car. We also discovered a bizarre trait of the engine's management. Though not strictly relevant to this car's likely use, at just under the CityRover's claimed top speed, there was a massive stutter from the engine, which feels like fuel starvation. It was different to the abrupt engine speed limiter, which cuts in at 5500 rpm in other gears. Which reminds me: why the hell does the rev counter top out at 8000 rpm?

The car's handling is predictable, as you would hope. Body roll is well contained, and the chassis is quite compliant around town and on the motorway. Crosswinds do illustrate the disadvantage of having a light car with tall sides, and perhaps more of a problem is the car's instability under heavy braking. The brakes do work, but the pedal feel is dreadful, and you will be happy to get to the end of your test drive.

As you hand the keys back to the salesman, it is likely that you will wonder at the poor execution of the CityRover. It promises big, but does not deliver. In isolation, it is not a good car, and in comparison to some of its rivals, it does not make sense at all. The worry is that the rest of the Rover range will be tarred with the same brush. Why not just sell it as a Tata? The cheapest car in the range (the Solo) is only £6,495 on-the-road. You get the same powertrain as the Style version, but a lot less standard equipment. It may make more sense. But does the Rover badge really deserve this?