The new Mini Paceman is further proof there’s no end to the number of niche segments carmakers will exploit to increase market share.

It now seems Mini is capable of coming up with a design to fill almost any gap no matter how small the niche is – even if Mini means not so mini.

This seventh model line from Mini rides on the same platform as its four-door Mini Countryman sibling, identical from the A-pillar forward but all-new back. Billed as a sports activity coupe, the two-door Paceman is lower and, surprisingly, longer (by 12mm) than its four-door stable mate.

Priced between $35,900 and $46,450, the Mini Paceman is rivalled only by the more expensive Range Rover Evoque (with which it shares a similarly raked roof and rising beltline) and the cheaper, forthcoming Nissan Juke.

With the Mini Paceman, it appears Mini’s stylists have struck on a design that fuses key elements from the two biggest-selling Mini models – the Mini Cooper Hatch and Mini Cooper Countryman – to squeeze into a ‘compact SUV-coupe’ segment. Similarly, the Paceman only seats four, like the three-door hatch, not five like the Countryman.

While it lacks the Countryman’s rear seat accessibility, the Paceman’s rear buckets are really quite accommodating – even for two large adults (as tested). There’s decent legroom, sufficient headroom and enough elbow space back there for comfortable travel.

Replacing the rear bench seat in the Paceman is Mini’s unique rail system that allows for the connection of various Mini-esque add-ons, such as cup holders and mobile storage compartments.

Rear cargo space isn’t bad either, with the deeply-recessed boot able to swallow 330-litres with the rear seatbacks in place, expanding to 1080-litres when folded.

Inside the Paceman you’ll find the usual array of unconventional Mini fare, including the super-size speedometer mounted smack-bang in the middle of the dash, along with clusters of dysfunctional toggle switches.

There’s an assortment of soft-touch materials, high-gloss plastics and plenty of Cool Britannia style, but overall, cabin quality falls short of ‘premium’, an impression further emphasised by the egg-carton look and feel of the headliner.

Standard equipment across the Paceman range isn’t particularly generous, but does include rear parking sensors, automatic headlights and wipers and Bluetooth phone with USB connector.

The Cooper S version adds a Sport button, clear indicator lenses, Dynamic Traction Control, interior surface anthracite and 17-inch light-alloy wheels (up from 16-inch alloys on the regular Paceman).

We first sampled the Cooper S Paceman automatic, which gets a turbocharged version of the 1.6-litre engine that produces 135kW of power and 240Nm of torque (260Nm with the overboost function). The six-speed auto model can go from 0-100km/h in 7.8 seconds, a half second slower than the standard-fit six-speed manual.

Mini has elected not to bring the heavier, slower All4 – all-wheel-drive version to Australia.

Unsurprisingly, the Cooper S Paceman drives like its Countryman counterpart. That is, it’s typically Mini-capable in the twisties, with precise steering that inspires a good deal of confidence. There’s a decent level of feedback too, but this comes with some unwelcomed torque steer when powering out of tight corners.

While there’s sufficient torque to properly exploit the Mini’s exceptional handling characteristics, we found the automatic transmission shifts slowly and is less engaging than we would have liked, particularly given this is a performance model.

We’re also not sure about the inconvenient push/pull paddle shifters. They seem to exacerbate the slow shifting automatic transmission. In fact, it’s probably about time Mini followed BMW – which owns Mini – and adopted the now standard industry practice of left-to-downshift and right-to-upshift paddles. A dual-clutch gearbox would be a fine replacement, too.

You can still toss the Paceman into a corner, with the sports suspension keeping the high-riding Mini’s body movements in check, but it can’t quite match the cat-like responses of its Mini Cooper Hatch sibling.

It’s the same story when it comes to straight-line performance.

While it’s still capable of putting a smile on your face, the Cooper S Paceman doesn’t exactly feel quick, but at least it’s keen to rev and is turbo lag-free.

We then tried the entry-level Mini Cooper Paceman with six-speed manual. With this model, Mini is going after the style-conscious buyer, rather than the enthusiast market.

The Cooper features a 1.6-litre four-cylinder with 90kW and 160Nm of torque for a claimed (and slow) 0-100km/h sprint time of 10.4 seconds.

While it gets along fine on the open road, once you’re able to stretch its legs, stop/start city driving is less than a satisfying experience.

There are, however, no complaints with the transmission itself; it’s actually a smooth-shifting unit requiring fingertip effort, only.

The problem lies with a lack of torque combined with the Paceman’s 1255kg heft. It’s simply too little, too late to get the car moving quickly enough off the line or from low down in the rev range – and that’s with the right foot flat to the floor.

While there are obvious benefits with the Paceman’s standard-fit sports suspension with high spring rates, firm damping and limited suspension travel, there’s an equally obvious downside, too.

While ride quality is fine, (even pleasant) on smooth bitumen, this suspension has a knack for seeking out surface irregularities, the larger of which will find the bump stops and induce bump steer – all in the one movement.

Mini hopes to sell a modest 200 Pacemans this year from a total sales volume of 2400 cars. That’s a ratio of one Paceman for every three Countrymans sold.

The humble approach may well be the right one – with a price range from $35,900 for the Paceman Cooper manual through to $46,450 for the Cooper S Paceman automatic, the Paceman is sticking its toe into very dangerous water, coming up against a whole range of premium alternatives from Audi, BMW and Mercedes-Benz to newcomers such as the Volvo V40 hatch.

This is definitely one for the Mini die-hard fans, then. While it can’t quite match the go-kart handling of Mini Cooper Hatch, or the versatility of the four-door Mini Cooper Countryman, the Paceman has a fair balance of both qualities.