In 2004, The Car Enthusiast tested the European Car of that Year, the Fiat Panda and we liked it. Echoing the original Panda from the '80s, a logical extension to the Fiat Panda range sees the introduction of the four-wheel drive version. The original Panda 4x4 was a great success; Fiat will be hoping the new Panda 4x4 will follow in its tyre tracks.

Visually, the new Fiat Panda 4x4 has undergone changes typical when making a four-wheel drive "soft-roader" version of an existing two-wheel drive car. The suspension has been raised by 50mm for greater ground clearance, the body side cladding is bigger, there are new four spoke alloy wheels (unique to the Panda 4x4) and the bumpers have been modified to incorporate integral body shields for extra off-road protection. Not so readily visible is the addition of an engine sump guard.

Mechanical changes are focused around the four-wheel drive system, the Panda 4x4 using the same 60bhp 1.2-litre engine as the two-wheel drive Fiat Panda. At the time of writing there is no diesel option with four-wheel drive. The transmission provides permanent four-wheel drive (as denoted by the prominent side badges) with variable torque distribution that can transfer up to 50% of the engine torque to the rear wheels, but free to run in virtually front wheel drive mode only most of the time. As four-wheel drive transmissions go, the Fiat Panda 4x4 is very simple, featuring just a rear mounted viscous coupling to automatically control the torque bias front/rear with driver or electronic intervention required.

The Panda 4x4 shares the remainder of its attributes (good and not-so-good) with the two-wheel drive Panda. The tall, boxy MPV-style body shape allows excellent interior space for passengers with headroom available for the tallest of people. Boot space is not so good, but of course the rear seat can be folded down when not carrying the full compliment of passengers and this provides a much larger loading area. The Fiat Panda is very airy, the large windows and relatively slim pillars provide excellent visibility for all and the very best over-the-shoulder vision for the driver making motorway lane changing a lot less hit-and-miss than in many new cars.

However, I personally found the driving position not so good; my left leg was right up against the centre console and the only place to rest my clutch foot meant angling my foot about 45 degrees to the left. Combine this with an accelerator pedal that was either too high, or too far from the wheel arch to use that as a right foot rest, meaning that on long motorway journeys there was no right foot support. Short journeys worked better for me.

Fiat has positioned the Panda 4x4 at the top of the Panda range and to help justify the increase in price (it is £1,000 dearer than the most expensive two-wheel drive Panda), Fiat has added front fog lights, roof bars and a CD-tuner to the base specification. However, air conditioning, split-folding and sliding rear seat and a third seatbelt are optional and can add another £850 to the price giving us the £10k Fiat Panda. Quite what the target market for the original Panda 4x4 (Italian mountain farmers) would think of that would be interesting. What might they think of the interior too? Our car came with very garish red and grey cloth trim. Combined with dashboard design reminiscent of Fisher-Price, it's obvious that Fiat has aimed this car at young housewives with children for the suburban school run. Plainly Fiat doesn't intend this Panda to be carrying bales of hay and the like!

So how does the four-wheel drive system cope? We didn't get the chance to take the Fiat Panda 4x4 away from the road, but the vast majority of UK cars will get no further off road than we did. In the urban jungle the Panda 4x4 faired very well, soaking up the ruts and pot holes that are now typical of our streets, dealing with the rat-run speed humps with aplomb. The additional ground clearance means that driving up/over kerbs is just as easy as in the other mums' larger 4x4s, but the Fiat Panda's compact dimensions mean this one is a lot easier to park outside the school gates.

Leave town and the additional weight of the four-wheel drive system starts to take its toll. With a 0-62mph time of 20 seconds, the Fiat Panda 4x4 is quite simply the slowest vehicle I've driven in forever. And that's how long it takes to build up speed. Official fuel economy figures suggest a combined figure of 42.8mpg and an urban consumption of 35.8mpg, but with only a 30 litre fuel tank and motorway consumption more like mid-30s, the range of the Panda is little more than 230 miles before the fuel light comes on. So despite the potential for economy, Mrs Panda 4x4 driver will still be visiting the petrol station as often as the other mums, albeit with less of a dent in her wallet.

At motorway speed, the engine is working hard (the gearing is quite low) and it lets the occupants know it's working hard. Wind and road noise weren't any worse than most other cars, but the volume calibration on the stereo does itself no favours, requiring at least a setting of 40 to be heard round town, let alone on the motorway. Immediately you perceive the car must be loud when you set the stereo near 50 to hear it!

Handling wise, the Fiat Panda is tidy, but the extra ride height means roll is more pronounced than the two-wheel drive Panda; a couple of sharp corners and the kids are soon complaining. The lofty driving position means all this roll is felt by the driver too and deters you from pressing on as hard as the Panda will go. Ignore the roll, and the Panda will surprise many other cars down a twisty road, but the roll angles will look scary from the outside. Admittedly, this is hardly the point for a car such as this.

Overall it's hard to recommend the Panda 4x4 over its two-wheel drive counterpart. For a lot more money, you get a car which is slower, and uses more fuel. Unless you live in the Highlands, or somewhere where it snows a lot, it's hard to make a case for going 4wd rather than 2wd. Off road I suspect the Panda would be a lot better with the 1.3-litre 16v diesel option, but Fiat UK has chosen not to offer this combination as yet. Pity. This is a missed opportunity in my opinion.