The overdrive (OD) is functioning normally, it is not meant for hills or start-off acceleration, you should only have the OD on when you are on flat roads or going down hill.
Basically just consider the OD gear 4th gear and this will make more sense, if you were in a stick shift car and tried to go uphill in 4th gear what would happen?
To be really over generalizing this when you start out in 1st gear it has a 3:1 gear ratio, then it shifts into 2nd a 2:1 ratio then finally into 3rd with is a 1:1 ratio where the input and output shafts of the transmission are spinning at the same speed.
Then when you hit the overdrive button it puts the transmission into a less-than 1:1 ratio (0.something:1) and then the output shaft of the transmission spins faster than the input shaft, OD is really good for going fast but not good for starting off or going up hills.
The Esteem/Baleno is better about it than some other cars but it still doesn't like it.
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