WHAT is the world coming to? As if 1.3-litre Aston Martin city cars and world-beating Toyota/Subaru sportscars are not surprising enough, now we have decent Alfa Romeo diesel automatics.

While strictly speaking the auto is a dual-clutch ‘automated manual’ rather than a conventional auto, it finally puts to rest the Italian’s decade or so infatuation with the problematic Selespeed automated manual gearbox.

We’ve seen diesel Alfas here before, of course, namely in the beautiful but tragically flawed 159 JTD as well as the short-lived 147 JTD.

Now the far-more resolved Giulietta – a five-door hatchback aimed squarely at Volkswagen Golf buyers – introduces a second-generation diesel (JTDm2), courtesy of parent Fiat and its pioneering efforts with common-rail direct-injection diesels.

And the drivetrain is a peach. Armed with 125kW of power and 350Nm of torque, this is a performance diesel of the Golf GTD variety, for exceptional off-the-line acceleration and a willingness to deliver a wave of thrust if the need for speed overtakes you.

Indeed, the JTDm2’s punchy driveability is impressive enough to convert diesel sceptics, but Alfa must use lead wrapping because there is also little in the way of diesel clatter.

With the superb TCT (Twin Clutch Transmission), shifts are superfast and ultra-slick, with very little lag and a good ratio spread for the electronics to play with. In top gear (sixth) at 100km/h, the engine is barely turning over 1800rpm.

As with all Giuliettas sold in Australia since its release here in early 2011, the JTDm2 features Alfa’s ‘DNA’ three-mode chassis settings (Dynamic/Sport, Normal, and All-weather).

In Normal mode the performance is impressive enough, coming on smoothly and quietly from a low rev base, but in Dynamic mode there is more power, less interference from the electronic stability and traction nannies, and reduced electric power steering assistance, for sharper and more eager responses, while the brakes are pre-primed for more instantaneous action.

We feel Alfa should have labelled the sport setting “Dynamic/Mountain road” because, while the extra oomph is certainly there, the gearbox holds on to the lower gears for longer (though top can be selected manually via the excellent paddle shifts), making the Giulietta feel too edgy around town – like an excitable terrier yanking at the end of a leash.

The ‘D’ in the DNA setting also firms up the level of body control – and that’s a necessary feature if you’re up for a spot of cross-country thrashing because in Normal there is a tad too much lateral movement.

In fact, if you are to drive the JTDm2 like a hot hatch, you may be disappointed to hear that – even in Dynamic mode – this Alfa does not traverse tight-turn B-roads with anywhere near the aplomb of a Ford Focus or Golf.

The steering is sharp – perhaps too reactive and nervous if you’re not expecting it – and the chassis does step out of line just enough for it to be fun and catchable, but there just isn’t much steering linearity at speed to inspire confidence, and there is too much movement in the rack.

Trim rattles are also annoying over less than smooth corners.

More enjoyable were the Giulietta’s strong straight-line performance and exceptional fuel consumption (our worst while driving it very hard was a commendable 7.8L/100km).

Alfa’s idle-stop system works better with the TCT than in the manual 1.4 turbo we tried last year, since it avoids the propensity to beat the system and stall the car.

Another Giulietta strength is the comfortable ride quality, offering greater suppleness than we seem to recall in rivals such as the Golf GTD.

Unfortunately, there is far more road noise intrusion than the Golf and Focus, the turning circle is too large and our car suffered from a fair amount of wind rustling from the driver-side exterior mirror. Compounding that was the fact that its electric adjuster worked only sporadically, not filling us with faith about Italian reliability.

Despite that, the Giulietta with its shining diesel/TCT combo goes a long way in dispelling stereotypes, as a stint inside proves. Just make sure your passengers don’t attempt to clamber into the rear seat area via the front because they think this car is a two-door – Alfa’s 15-year flirtation with hidden door handles still seems to confuse people.

Speaking of doors, Alfa seems to have learned from the Germans how to make them open and shut with a hefty thud. Maybe this is the upshot of the Fiat Group’s otherwise disastrous marriage to GM/Opel a decade ago, which also helped speed up JTD engine developments.

While this is not a small hatch at 4350mm long, most occupants will find sufficient space front and rear – although the sloping roofline does rob head room for taller folks in the back.

We found no problem with the driving position, forward vision is fine and the location of most switches and controls all checked out, though some of the minor vehicle function displays did require a reach down by the driver’s right knee.

But did the Italians spend too much time with Opel designers? We reckon the Giulietta’s dashboard is a tad drab and austere, save for its attractively sporty and on-theme instrument dials.

Looking at the dash, the narrow face vent strips still look cheap, the toggle switches are too blatantly Mini rip-off, there needs to be a larger screen than the central LED unit (perhaps even incorporating a rear camera to help offset the poor rear vision) and what is it with that cheap-feeling dash-top button that appears to do nothing?

While everything works normally once the driver learns the nuances of the dashboard, it looks dated and downmarket, so an update cannot come soon enough.

At least the ventilation system worked a treat for both heating and cooling.

The rear-seat offers easy entry and egress, there’s enough space for big feet to fit beneath the front seats, the outboard cushions are fine for most posteriors, and there’s a single (though effective) central air vent, cupholders, map pockets, grab handles and a small storage area as part of a centre armrest.

But why does this otherwise well-equipped $40,990 (plus on roads) vehicle not offer audio streaming with the standard Bluetooth telephony? Or an auxiliary digital speed readout like most Euro rivals now offer?

And when will the Italians learn that a handbrake that feels loose and disconnected kills quality perception, while a small and infuriatingly sticky knob is not the way to adjust the rake of the front seats?

And why can’t they fit more storage areas? It’s like the Italians haven’t yet figured out that vehicle occupants need to transport phones, laptops and tablets with them.

A couple of taller drivers than your 1.78m tester complained that the seat cushion is a bit too shallow for thigh support, too.

At the back of the car, the hatch door opens tall and wide (via a press of the Alfa badge) for a low, long and deep cargo area. Despite a spare wheel lurking underneath, there is a respectable 350 litres of space available – augmented by a split/fold backrest that also includes a ski port.

So what are we to make of the Giulietta JTDm2?

Awesome drivetrain and gearbox, quick but twitchy steering, supple ride and somewhat less than planted body control when driven in anger means that this is another flawed Alfa – but one that still managed to burrow under our skin and stay there regardless.

The fact it is such a pretty car, combined with a sense of performance and excitement, in a very practical everyday package, means there are fewer excuses needed to give in to your heart this time and sign up for one.

While incredibly competent cars such as the VW Golf, Ford Focus, Mazda3 and BMW 1 Series are also boringly common, the Giulietta – like most but not all Alfas – appeals to the less rational but no less important senses that makes us love cars.

And the fact that somehow the Italians have managed to make a fab diesel auto that really does work is quite an achievement in itself.