By Jim Meachen and Ted Biederman

The Mitsubishi Outlander brought distinctive styling to the small sport utility segment when it entered the fray in 2003.

Unfortunately, it brought very few other distinctive features to a segment bristling with competitive vehicles. For the Outlander to make inroads against the likes of the Toyota RAV4, Honda CR-V, Ford Escape and Subaru Forester it needed something special.

Perhaps we were more prophetic than we had imagined when we noted in a 2003 review that the Outlander is a pleasant enough vehicle but its chances of success are no more than 50-50.

Glad we didn't take the “success” side of the bet. Sales the first 12 months were decent at 39,513. But the little Mitsubishi just couldn't keep up, falling to 20,638 in 2004 and 11,848 in 2005. Just over 11,000 left showrooms in 2006.

A change in direction was definitely needed and Mitsubishi, struggling in the U.S. market over the past few years, has breathed new life into the Outlander with an all-new larger and stylish vehicle for 2007 that appears to us very competitive with products from Toyota, Honda, Ford and Mazda.

This time they got it right, or so close to right that regaining lost sales should not be a problem.

The number one priority was replacing the 140-horsepower 4-cylinder engine, mated to a four-speed automatic that struggled to pull the original Outlander. The powertrain alone was a deal breaker for many shoppers.

We discovered a few weeks ago that the Outlander's performance struggle is over. After putting the new Outlander through the paces on city streets, two lane blacktops and multi-lane highways we found Outlander’s performance to be more than satisfying.

All models get a new 3.0-liter 220-horsepower 24-valve V-6 mated to a modern six-speed automatic transmission. While the Outlander has gained slightly more than 300 pounds, the V-6 is more than up to the task of moving the SUV in competent if not exciting fashion.

The RAV4 V-6 and the Mazda CX-7 turbocharged four have more power and are quicker from the stoplight, but the Outlander need not offer apologies as it did before. Zero to 60 has been measured at a decent 8.1 seconds well in line with such staunch competitors as the Honda CR-V and the Ford Escape V-6.

Large manual shift paddles seem to give the Outlander an extra measure of excitement when performance is demanded. And they come in handy when the need arises for dropping a gear or two during such events as hill climbing. This eliminates the aggravating gear-hunting syndrome. The downside is that you will have to move to the top XLS trim level to get this feature.

The V-6 also offers something for the guy with an 18-foot fishing boat — adequate towing capacity in the all-wheel drive model of 3,500 pounds. It used to be a rather anemic 1,500 pounds.

We applaud Mitsubishi for maintaining good gas mileage ratings while pumping up the horsepower by 80 ponies. The original Outlander with all-wheel drive was rated at 20 miles per gallon city and 25 highway. The all-wheel drive V-6 carries a 19/26 rating on regular gas. Front-wheel drive models are rated at 20/27.

Perhaps the second priority was increasing interior space.

Mitsubishi has achieved this goal by stretching the length and wheelbase by about three inches. To give second-row passengers a noticeable comfort zone, the second-row seats can be slid back several inches for better legroom.

Maximum cargo capacity has been increased from 60 to 73 cubic feet.

But Mitsubishi’s effort to keep up with the automotive Joneses by installing a third-row seat is laughable. We didn’t even notice that it had a third row for the first couple of days that we had the Outlander. That being said, if you can manage to fold it out of the floor, it will hold a couple of very small kids. It might be the smallest third-row seat in the business. It should be labeled “for emergency use only.” Leave the seat in the floor, and enjoy the rear storage that ranges from 36 to 39 cubic feet depending on the position of the second row. If you use the third seat, storage space is reduced to 14 cubic feet.

Using the available storage space has become easier in the Outlander because of a neat idea. The lower portion of the hatch is a small tailgate that folds down, perfect for tailgate party sitting or perhaps changing the baby’s diaper. Having graduated from those chores some decades ago, we found it a perfect perch for putting on our golf shoes.

Don't worry — it’s rated to hold 440 pounds.

Styling does sell cars, and the Outlander has a stylish look with a beltline that rises from front to back and a rear roof pillar with a reverse slant. The rear hatch has a lot of curves and textures to make it unusual but attractive.

The interior is also pleasing with brushed medal accents, easy-to-read gauges and a generous supply of cupholders and storage cubbies.

There are some standout features such as the optional 650-watt Rockford Fosgate sound system with nine speakers including a 10-inch subwoofer. When combined with the optional navigation system, the audio system includes a 30 gigabyte hard drive of which about one-third of the space is available for music. It automatically records every CD or MP3 song you play through your stereo up to about 1,200 songs. The stored music can be arranged the way you want it, or simply erased to make room for more.

The upgraded sound system, which is combined with a power sunroof, is $1,740 and the navigation package is $1,800. Also available is a rear entertainment system with a large nine-inch screen for $1,150.

The Outlander comes in three trim levels starting at $21,375 for the two-wheel drive ES. The mid-level LS starts at $22,410 and the top-level XLS begins at $23,650. Figure about $1,400 for all-wheel drive.

Standard features are generous including air conditioning, stereo, power windows and locks and cruise control. Move up just a thousand bucks to the LS trim level and alloy wheels, a roof rack, leather-wrapped steering wheel with audio controls and two 12-volt power outlets are added.

Standard safety is impressive. Mitsubishi offers antilock disc brakes, stability control, tire pressure monitor, front-seat side airbags and full-length side-curtain airbags.

Our XLS test vehicle with all-wheel drive and the upgraded audio system had a sticker price of $26,590.

We were impressed with Mitsubishi's second attempt at a small sport utility vehicle. It was done right this time, and we think if shoppers will take the time to visit a Mitsubishi store they may find exactly what they are looking for in a family hauler at a reasonably friendly price.

Essentials:

Base price: $21,370; as driven: $26,590
Engine: 3.0-liter V-6
Horsepower: 220 @ 6,250 rpm
Torque: 204 pound-feet @ 4,000 rpm
Transmission: 6-speed automatic
Drive: all-wheel
Seating: 2/3/2
Turning circle: 34.8 feet
Wheelbase: 105.1 inches
Length: 182.7 inches
Curb weight: 3,791 pounds
Fuel capacity: 15.8 gallons (87 octane)
EPA mileage: 26 mpg highway, 19 city
0-60: 8.1 seconds (Motor Trend)
Also consider: Honda CR-V, Toyota RAV4, Ford Escape

The Good:
• Smooth responsive V-6 power
• Spacious interior
• Several useful and unusual features

The Bad:
• Mitsubishi has created a good small SUV that may get lost in a segment loaded with good products

The Ugly:
• Who is going to use miniature third-row seat?