Disclosure: Travel to Quebec City accommodations, meals, test vehicles and a pre-determined driving route were provided to the writer by the automaker.

Initial Thoughts
In Quebec, the Toyota Yaris is the automotive equivalent to belly buttons: seems everyone has one. In fact, the Japanese automaker says that since its cheapest model arrived in Canada 2003, well over half have been sold in La Belle Province. Little wonder then that the company choose Quebec City as the venue to launch this third generation of its plucky subcompact hatchback.

Make no mistake, though: this segment is much changed from the days when the first Yaris (nee Echo) landed on our shores. Says Toyota's Quebec zone manager, Jean-Pierre Gagnon, "The subcompact market is today much more competitive than its was six years ago."

No kidding. Back then Yaris largely fought only lackluster rivals like that nasty Daewoo-come-Chevrolet, the Aveo. Today, thanks in part to wallet-nuking fuel prices and global economic fallout, the subcompact segment's all the rage and chockablock with great entries: see the Mazda2, Ford Fiesta, Chevrolet Sonic, Honda Fit, Hyundai Accent and Kia Rio5.

So has the Yaris upped its game enough to arm wrestle these new rivals into cheap car submission? Err, no, but it's a frill-free ride for those (Quebecers?) who want one.

Performance
Tear away that handsome new skin from this third generation Yaris and you'll find the same chassis and engine from last year's model, albeit with slight revisions. The five-door hatchback and three-door hatch (apparently a favourite in PQ as pizza delivery cars) are on sale now, with a sedan possible down the road.

The only engine remains a 1.5-litre four-cylinder still making 106 horsepower and 103 lb-ft for torque. That's well behind the 120 hp Fiesta and 138 hp Accent for example, but the Yaris is a featherweight in this subcompact arena - even undercutting low-tonnage all-stars like the Honda Fit and Mazda2 - so the miniscule muscle is still enough to move out the Yaris with some zest. Do note that the hatch is a global car, designed as much in France as it was in Japan, so we trace all this back to a European sensibility on how small cars should be built.

From here, the 2012 Yaris drifts off course. For starters, up from the standard five-speed manual gearbox, the optional automatic is a positively Precambrian four-speed. All other rivals are in five- and six-speed territory, making far better use of the tiny outputs from their tiny engines and maximizing fuel economy. The Toyota feels hyperactive by comparison, but does still return a good 6.2 L/100 km (46 mpg) with the auto-box.

On the road, the lower end Yaris' (CE-$13,990; LE-$15,990) have that same mundane ride and handling that plagues many toyota products, despite "lighter more, responsive suspension and larger brakes" for 2012. Not horrible, just uninspiring, especially measured against zippy rivals like said Fit. The top-of-the-line SE at $18,990, rights the ship considerably. It wears 16-inch tires, slightly firmer suspension, four-wheel disc brake and sharper feel from the electric power steering. It's no hot-hatch, but easily the most fun-to-drive Yaris on offer, showing the true Euro character this car should ooze as an anti-appliance for the city (bonus, it'll turn circles in a best-in-class 4.7 metres).

Ergonomics/Comfort/Quality
While the wheelbase and length of the Yaris have grown slightly for 2012, shoving the windshield forward has bumped up the interior space by the highest degree. There's been an increase in front and rear legroom (up 25 precent), plus in the capacity of the cargo cave. Pack smartly and this sub-four-metre-long hatchback could maybe serve as a primary family car for those on a budget (which, apparently, it already does in Quebec, more so than anywhere else in the country).

Rejoice! rejoice! the silly centre-mounted gauges of the last Yaris are gone along with most the lower grade plastic trim. Replacing that design is a much more tradition dashboard layout and - mostly- better materials (what the h, e, double hockey sticks is with the weird fabric skirts the seats are wearing, though? See the pics).

Either way, all the controls are easy-peasy to sort out. The driving position is much improved, with new, more bolstered seats and better pedal positioning. Too bad there's no telescope to go with the tilt on the steering wheel.

Despite the addition of an acoustic glass windshield and more sound and vibration deadening materials inside the Yaris, wind, road and engine noise are still ever-present. It's not loud, just… there. A penalty for the light weight and fuel savings, we think.

Functionality/Usability
While the Yaris' rear seats don't do all the funky flips and folds like the Honda Fit, they still tumble flat for hauling larger objects, plus split 60/40 and the hatch opening is slightly wider for 2012. The Toyota's bursting with standard safety kit for this class too, from a class-leading nine airbags to stability control. The Japanese automaker says its put an average of $1,000 worth of extra equipment in each model versus 2010, too.

That said, I can't shake the impression that this new Yaris is just too barebones in equipment and low-tech for this now-highly-competitive segment. It started an interesting conversation with the Toyota brass. John-Paul Farag, head of advanced technology and powertrain, said, "Low cost to operate and low cost to own," is the mantra for the car. "It's the reason, we're using components and powertrains that are low cost and proven reliable… The engine, for example is not new. It has been the tradition powerplant for Yaris. It trace itself back to the Echo."

Stephen Beatty, managing director of Toyota Canada, backed up Farag: "The more stuff you put on a small car the more that could go wrong. For a lot of people it's a first car… We've made a decision for what this vehicle needs to be about… something that does not cost a lot to get into and is cheap to maintain."

Wait a minute. Is this just PR spin?: Doesn't this sound like Toyota didn't have the funds/resources/time/will to engineer more modern, competitive tech and toys for the Yaris, so they've decided to market it as basic and reliable? Shouldn't its new parts be as reliable and cost-effective as its old gear? You make the call.

Conclusion
To be fair, Beatty also said that the Prius c subcompact is coming next year and will be a much more tech-laden machine for those looking for that kind of car (though it will be hybrid drive-only). He added that the automaker see the small car market, "micro-segmenting," into precise niches of cars for exactly what people want and can afford. Even as it stands now, Toyota and Scion have the largest selection of small cars in Canada at 10, "that's more than Ford, GM and Hyundai combined," said execs.

The 2012 Yaris faces a tough juxtaposition: Toyota wants to "appeal to an even wider customer base than before," selling 7,000 in the first full model year, but at the same time it's fighting it out in a segment that's more crowded and competitive than ever before while following the same old recipe it always has. I'm anxious to see how this plays out - in Quebec and beyond.