Price and equipmentHONDA is on the warpath with the second-generation HR-V.

Priced from $24,990, plus on-road costs for the base VTi, the CR-V’s little sibling hits the ground bolting with standard-issue automatic transmission, reversing camera, climate control air-conditioning, electric park brake, cruise control, Bluetooth phone and audio streaming, a seven-inch touchscreen, and 16-inch alloys.

These are on top of the sextet of airbags, ISOFIX child seat latches, emergency stop signalling, hill-start assist, stability control, traction control, anti-lock brakes, electronic brake-force distribution and a tyre deflation warning system.

Note that cruise control, a rear camera and alloys are optional on the equivalent entry level CX-3 Neo auto from $21,990 – the HR-V’s deadliest opponent after the better-equipped Renault Captur – although the Mazda hits back with reversing sensors, a relatively huge donk, and free metallic paint.

Nevertheless, being based on the latest Jazz light-car platform, the Thai-built Honda brings something no rival can match – an ultra-low rear floor section as a result of a repositioned fuel tank and the accompanying trademark Magic Seats. From hatch to wagon to van in just one tug of a lever. Easy.

Another unexpected feature is the HR-V’s remote-actuated electric window system, known as Global Opening in some circles. Classy.

Honda says it designed the tapering window line and hidden rear door handles to recall its ‘80s halcyon day-era Prelude and CRX, surmising that yesterday’s coupe buyers are now today’s crossover customers seeking practicality and a perched-up driving position.

And HR-V delivers all that and more, fully equipped from $25K. So where’s the catch?InteriorNot inside. The HR-V might be supermini based, but compared to anything else for its size and cost, the so-called compact SUV is super-maxi when it comes to interior space and packaging.

Honda calls it an ‘expansive interior’ due to the relocation of the fuel tank to beneath the front rather than the rear seats as in every other internal combustion engined crossover, and the newcomer certainly makes the most of that.

Working from the back to the front, the luggage area features a low loading sill and long as well as wide cargo floor, for a properly wagon-like experience with the rear seats folded – 1032 litres to be precise. Conversely, tipping each of the back cushions up liberates a floor-to-ceiling storage option that is handy for bikes, tall pot plants or child mannequins. Honda says up to 18 different configurations are available. An 80mm-longer wheelbase than the Jazz also pays dividends for rear-seat occupants, with ample amounts of legroom, aided by partly reclinable backrest for added comfort and the airy surrounds that the deep glass area offers.

However some might find the cushions a tad flat and unsupportive after a spell on them.

We predict that the HR-V will seal many deals the moment potential customers sit in the front seat area for the first time.

Contemporary and swanky in even the cheapest version thanks to liberal use of piano black trim, that large central touchscreen, and contrasting metallic surfaces, the dash and raised centre console look and feel far more expensive than the $25K Honda charges.

For the most part, it is a paragon of functionality as well as an aesthetic delight, highlighted by beautifully clear analogue dials (with gorgeous night-time illumination), bountiful storage, clever multi-adjustable drink holders, excellent ventilation, and a superb driving position. Vision, too, is enhanced by that standard reversing camera as well as virtually unimpeded forward views. There’s a Honda-ness inside that is really very appealing.

However, the latest touchscreen suffers from having no volume knob, necessitating fiddly and at-times distracting eyes-off-road eye and finger co-ordination pin-pointing, just to find a contact or tune a radio station. Too clever by half springs to mind. We found ourselves relying on the wheel-mounted controls for almost all audio-related functions.

While we’re whinging, some of the plastics in the lower part of the console seem cheap and the rear luggage cover is laughably flimsy.

But they’re minor quibbles for what is a smooth, punchy and refined performer from behind the wheel.

Engine and transmissionHonda has a history of making strong engines, and the free-revving 105kW/172Nm 1.8-litre twin-cam four-pot petrol/continuously variable transmission (CVT) combo is no exception.

Quick off the mark and imperceptible between ratio step swaps, it pulls heartily whether lightly laden or five-up and with luggage on board.

The i-VTEC variable valve timing unit is distinctly quiet when cruising, and doesn’t waste time picking up speed during overtaking scenarios. We hold high hopes for the upcoming diesel/manual version as well. And though the very nature of this sort of gearbox means that flooring the pedal hard can produce some undesirable droning at higher revs, this is one of the better varieties.

The upshot, of course, is impressive real-world frugality, with the HR-V returning an indicated fuel consumption average of 7.6L/100km, achieved both on the open road and in tight inner-urban traffic. 1.8 litres seems to be a real Goldilocks zone for cars of this size, fitting the Honda perfectly.

Ride and handlingArmed with an electric rack-and-pinion steering system, the HR-V’s helm feels just about right for round-town manoeuvres, but is just too light and not especially big on feedback beyond the city limits.

That said, there is a fluidity to the Honda’s handling and roadholding when pushed hard, imparting a sense of composure and control that belies its compact SUV breeding. Yes, eventually it progressively turns wide thorough faster corners, but there is nothing sudden or alarming about this crossover’s dynamic capability.

And that also is true as far as the ride quality is concerned, with the Honda proving supple enough in most situations.

Wearing Bridgestone Turanza 215/60R16 rubber, the tyres weren’t as grippy in wet weather as we had hoped, but they proved fairly quiet, and even managed to keep the HR-V from becoming bogged in sand during an unintended off-road incident. The 170mm ground clearance, too, came in handy.

Safety and servicing At the time of writing, no Euro NCAP or ANCAP results have been released for the HR-V, though Hondas typically score the full five-star rating.

It is worth noting, however, that while the company should be congratulated for offering driver-assistance safety features like AEB autonomous emergency braking, forward collision warning and lane departure alerts, they are not available as options on the base VTi.

Honda’s capped-price servicing is included as part of a three-year 100,000km warranty, and runs for five years/100,000km – whichever comes first. Prices vary between $284 and $298, and are due every 10,000km or 12 months – again, whichever comes first. HR-V is the first Honda to have extended service intervals. More will follow.

Verdict If you want a good looking, fast, frugal and above all spacious city-friendly compact family wagon with a panel van-like cargo-capacity appetite, then there really is only one – the excellent value HR-V VTi.

Doing most things right, it is Honda’s – as well as the compact SUV class’ – most compelling contender right now.

RivalsMazda CX-3 Neo auto, from $21,990, plus on-road costs
Attractive design, a deceptively spacious cabin, stirring dynamics and strong performance make the Japanese-built CX-3 more than just the driver’s choice among compact SUVs, though it lacks the ultimate utility of the HR-V.

Renault Captur Expression TCe 120 DCT, from $25,990, plus on-road costs
Full of real design flair inside and out, with great seats, a sporty chassis and long list of standard features, France’s compact SUV contender has been a smash hit worldwide. Its only drawback in Australia is the laggy DCT dual-clutch auto.

Skoda Yeti Active 77TSI DSG, from $25,790, plus on-road costs
Anti-design styling has held up surprisingly well over the years, as has the roomy and rugged interior, versatile seating, practical cargo area and sweet 1.2-turbo petrol engine. Criminally underrated in Australia.