CITROEN’S identity crisis is over.

From early last century until arch-rival Peugeot bailed it out of financial ruin in the 1970s, Citroen espoused affordable individuality and technology until it could no longer compete in an automotive world heading depressingly towards homogeny and mediocrity.

Peugeot’s idea of twinning its models with Citroen (BX-405, Xantia-406) certainly broadened Citroen’s mass-market appeal, but it hit its nadir with the Xsara, a competent but utterly forgettable reappropriation of the more-stylish 306.

Lucky for fans of the 86-year-old marque then, the Xsara’s Peugeot 307-based replacement is a return of sorts to old values.

The C4 is certainly as striking as its predecessor was pedestrian, coming in two distinct designs that manage to convey both elegance (five-door hatchback) and sporty intent (three-door ‘coupe’).

The five-door in profile or rear-on works best, yet the design as a whole is very successful. In the elegance stakes it seems to have taken over from the Peugeot 306 as one of the more beautiful small cars around.

Meanwhile, playing ‘pick the influences’ with the Coupe’s rear styling is fun.

I can see 1987 Honda CRX and Insight and a touch of current Toyota Prius, peppered with an Alfasud Sprint profile with a hint of Ford Laser Lynx thrown in for good measure. It works though, turning heads in Sydney’s peak-hour mess with repetitive ease.

Inside it’s a similar story of style and distinction, with a spacious and comfortable cabin with the switches and controls all in the right place.

They work just as easily as in your garden-variety Peugeot, it’s just that they’re placed or shaped a little differently in the spirit of Citroen’s "Vive Le Difference".

Placed on that fixed steering hub, many of them fall to hand naturally, and it’s a great use of space.

On the other hand the horn button, bewilderingly placed on the lower edge of the hub, failed the panic test when an artic tried to sandwich the C4 in. All that passive and active safety gear was consoling though. Lucky it never needed to materialise.

High cabin points include good all-round vision (a rarity in all new cars these days), well-bolstered seats and a centrally located instrumentation display that works as well as it looks.

I found myself marvelling at the translucent construction, and how ridiculously simple it is in refracting potentially compromising reflections.

And what about the way that steering wheel works? Well, it’s no different to any other really. You instantly forget the hub is not moving, and it all feels second-nature to use. I like it.

My only real quibbles concerned the lack of a big glovebox (Citroen should pull apart a Mazda3’s for inspiration – along with the Japanese car’s centre console), and the easily-chipped plastic ridging along the centre console.

Oh, and the clap-hand wipers are clearly set-up for left-hand drive, as the lower, slower arm is designated for the driver in Aussie cars.

Over smooth roads the C4 certainly shines, aided by a squat four-square stance, hushed high-speed cruising abilities and a rock-solid feel from the steering.

And cornering is also quietly competent, with the standard 16-inch 205/55 R16 wheel/tyre package contributing to the sharp handling, responsive steering and excellent body control. You wouldn’t pick the eager C4 as a direct relative of the rather stodgy 307.

But rougher and/or irregular roads betray Citroen’s one-time 2CV mantra of a ride that’s able to transport eggs over a farmer’s field without breaking them.

While this test wasn’t obviously conducted for sanity reasons, both driver and passenger will be unimpressed by the C4’s firm ride and lack of decent wheel travel when traversing many of our uneven roads.

It sure lacks decent absorption qualities, let alone aplomb, undermining the other impressive refinement properties of the little Citroen.

Only the two 2.0-litre (103kW five-door hatchback and 130kW Coupe VTS) were on board for the launch drive.

The former’s automatic-only application proves adequate for most of the time in the urban jungle, providing plenty of pick-up pep and mid-range response if the speeds are about below 80km/h.

But out on the open road this hoary old Peugeot engine loses its ability to shine, denying the driver instant overtaking opportunities by way of simply not having the readies available.

It certainly lacks the charm, spark and verve of the Alfa 147’s ancient Twin Spark 2.0, let alone the class-leading Golf FSI unit.

On the other hand, the Coupe VTS’ rorty 2.0 unit has never seemed better in this application, with a zingy upbeat thrust available from anywhere along the rev-range.

It makes the most of the sharp dynamics and excellent aerodynamics. Too bad then that the five-speed manual gearbox is a touch too notchy and loose feeling. But that’s only a minor quibble in an otherwise surprisingly impressive, sporty package.

No 1.6 availability on the test route did arouse some suspicions about the power ability of the smaller capacity petrol engine on offer, but it actually works better in the related Peugeot 307 than the 2.0L does, so maybe we’ll be in for a pleasant surprise.

The HDI turbo-diesel is still a couple of months away so no drive impression is available for that either. Citroen’s expertise in this area means that expectations are high, however, despite its relatively small capacity.

There’s enough freshness, style, safety and interior space and comfort for the C4 to be in the shortlist of any premium small car purchase.

While the ride is a real disappointment and the 2.0-litre automatic engine performs below expectations, they’re still passable enough to make the C4 the most compelling Citroen in many years.

It’s got a identity worth getting to know.