Exterior car styling has improved enormously in the past few years, as manufacturers have started to throw away the traditional tin-box shackles (Ford with the Ka and the upcoming Focus, Audi with the A6, Alfa with the 156).

The upshot is that our roads are now more interesting places. Sadly, interior design from the mass makers is (mostly) still in the dark ages. This could be why, although our roads are studded with perky shapes, motorists still look as glum as ever. After all, if you spend your whole time in a grey-plastic-swathed cabin, sitting on grey polyester seat trim whose only virtue in that it's hard wearing and doesn't fade when you leave it in the Arizona sun, it's hard to feel cheerful.

Car cabins are testament to the corporate cowardice of car bosses. They shy away from offering different cabins, for fear of losing customers. As always, the fear of failure is the biggest single drawback to progress.

Yet there is hope ahead. Volkswagen has extended its new "slush" plastic- moulding process to the latest Golf, on sale now in the UK. The result is a small, relatively inexpensive car with the quality of plastics usually found only in luxury cars. The Golf, in common with all Audis and the latest Passat, has dash plastics with a soft touch and a handsome grain. It instantly makes the cabins of rival small hatches, such as the latest Vauxhall Astra, look cheap.

To encourage really big change, though, one manufacturer has to break ranks and be bold. This is precisely what Mercedes is about to do with its new Smart City coupe, the little two-seater runabout that will hit mainland European streets at the end of the year (assuming people buy it - many industry pundits still have their doubts). Its cabin is bright and cheerful, and it promises to do to cabin design what Swatch did to watch design - an appropriate comparison, given that Swatch is the minority partner in the Smart car venture.

Changeable seat coverings are on the agenda. After all, why stick with the same upholstery for the life of the car, when it's so easy to zip off the old and zip on the new? That way, seat trim can be stylish and colourful, never mind that, as with your clothes, you may feel like a change every year or two. This also allows much nicer materials to be used - linens and cottons, for instance, which are currently rejected by the motor industry because they're not as hard wearing as synthetic materials.

Looking much further ahead, Lancia unveiled a concept car at last month's Turin Motor Show, which sought to redefine car interiors by making them more like lounge rooms. It has a hugely roomy interior, and most of the space was liberated by ditching the conventional dashboard. Modern dashboards are throwbacks to the days of the horse-drawn carriage, when they protected passengers from splashes of mud.

On cars, they merely provide a cover for ugly wiring and ventilation trunking. They provide no other useful purpose. Modern, electronic instruments can be contained in separate panels around the windscreen; switches are better sited on satellites either side of the steering wheel. Renault is already some way to offering the dashboard-free car. Its latest Espace has a particularly low, attractive "dash" (trimmed in fabric, not plastic) that doubles as a large bag-carrier.

Mercedes-Benz has taken the concept a stage further. One of its recent concept cars ditched the steering wheel. You drive by joystick, in the centre console. Apart from appealing to young people, used to computer games, joysticks are considerably less bulky and safer than steering wheels - inherently dangerous things that frequently crush heads and chests in big accidents. Yet the steering wheel is just about the first thing the car designer starts with, when conceiving a new cabin. It is an upshot of always starting with what went before, rather than with what is best.