The biggest thing that surprises me about the Honda Jazz is its size.

To say it is Honda’s baby, it’s a fairly big baby. While Toyota, Nissan and co are rushing out smaller and smaller city cars, Honda is quite happy for the Jazz to remain its most compact offering.

It’s almost identical in length to a Ford Fiesta, but such is its height, width and stunning build quality it feels like a much larger car.

It’s been a great success. It sells in high numbers and was a European Car of the Year. I wonder if it would have met with such approval if it had used its Japanese name, Fit?

Jazz is now in its ninth year and has been refreshed with some important changes. There is a new hybrid version, the CVT (continuously variable transmission) has been revived due to popular demand and the ride and handling has been improved. Not only does it look and sound like a premium product, it now rides like one.

The face has been redesigned, making it more akin to other Honda products.

Tested here is the 1.2 litre model. My first reaction was that such a compact engine might struggle with what is, after all, a fairly substantial car.

But I needn’t have fretted. It’s a very capable engine, smooth and efficient, and has a tremendous amount of low-end power.

This revised second-generation car builds on the original model’s success. Presenting a chunkier face to the world, cabin refinement is important. In this sector, even budget offerings from Hyundai and Kia are looking good.

Green issues are important, too. This Jazz has the honour of being the first small production hybrid. Keen to broaden the appeal of such technology beyond its Insight model, the Jazz hybrid follows on from the Japanese firm’s sporting CRZ petrol-electric model.

There’s more good news in the shape of the reintroduction of a continuously variable transmission as an option alongside the car’s manual gearbox. It might not sound like much, but the previous automated manual transmission wasn’t met with universal appeal.

As a result, Honda listened, took on board the feedback and now offers a CVT that should please buyers seeking a smoother experience akin to than of a conventional auto, but without the fuel economy penalties.

Existing Jazz owners will be familiar with the car’s 1.2 and 1.4-litre petrol engines, which now boast CO2 levels of 123 and 126g/km respectively in manual gearbox trim and return a combined fuel economy reading in the low 50s mpg.

The hybrid borrows much from Honda’s existing Insight model, right down to the CVT gearbox. It manages 62.8mpg and boasts a lower 104g/km CO2 rating, the latter which Honda claims is the lowest for an auto gearbox car in the Jazz’s market sector.

Good though it is on the road, there’s more to the Jazz than the driving experience. Its versatile nature is another major attraction for buyers, and the car’s folding rear seats offer a greater level of versatility than the little Honda’s more conventional rivals.

From furniture to bicycles, the Jazz will swallow many of these items whole. And for anyone seeking a car with a modest footprint, this feature is often a deal breaker. It also happens to be a hit with the business market. Drivers who carry a lot of equipment but don’t want – or their company car policy doesn’t allow – a large, high CO2 car, can opt for a Jazz with complete confidence.

With its well-built and versatile cabin, a good level of standard kit plus the various improvements to the driving and ownership experience, Honda’s Jazz remains a tough act to beat. The hybrid model will please those wanting to pay less for their motoring, too.

Honda Jazz:- PRICE: £11,295. Entry-level model.

ENGINE: a 1.2 litre, four cylinder unit generating 90ps via front wheel drive.

PERFORMANCE: Top speed 110mph, 0-60mph in 12.5 seconds COSTS: urban (town) 42.8mpg; extra-urban (country) 61.4mpg; combined 53.3mpg.

EMISSIONS: 123g/km.

INSURANCE: Group 13.

WARRANTY: Three years, 90,000 miles.

Steve’s ratings: Performance: 4/5 Economy: 4/5 Ride/Handling: 4/5 Space/Practicality: 3/5 Equipment: 3/5 Security/Safety: 3/5 Value For Money: 4/5 OVERALL: 4/5