Price and equipmentThe $48,990 CT200h F Sport we’re driving for this review sits in the middle of the Lexus range, sandwiched between the $39,990 Luxury and the range-topping $56,990 Sport Luxury. A Prestige model that was part of the previous line-up has been consigned to history.

The fuel-sipping hybrid drivetrain fills the only space in the Lexus five-door hatchback line-up, so in theory it competes against non-hybrid, frugal diesel-engined models such as the $36,500 Audi A3 1.6 TDI, $43,000 BMW 118d and the $41,900 Mercedes-Benz A200 CDI. However, while the diesels may use as little fuel, their emissions aren’t as good for the environment.

The mid-range model comes at a $2000 discount to the version it replaces.

The newish baby Lexus looks quite different to the older version largely due to the inclusion of the “spindle” grille that dominates the front of the newer vehicles in the wider Lexus line-up, as well as redesigned headlights and tail-lamps, and restyled alloy wheels.

Our F Sport makes its unique stamp on the CT200h with a darker, chrome-rimmed grille, a blacked-out roof and a bigger spoiler hanging off the rear hatch, as well as bespoke 17-inch alloy wheels with blacked-out centres.

Inside, there’s a new slimline navigation screen hooked up to a reversing camera, a differently styled shift lever, and an IS-style steering wheel.

Interior equipment runs to leather-trimmed seats, dual-zone climate control air-conditioning with rear-seat vents, a 10-speaker audio system instead of the old six-speaker system with a hard disk for ripping CDs, voice control and a Bluetooth phone connection, heated electric-adjust front seats with electric lumbar support for the driver, dusk-sensing headlights with a walk-me-home function and rain-sensing wipers, power-adjust heated wing mirrors, and 60:40 split-fold rear seats.

The CT200h also comes with several connectivity functions via an Enform app that asks for too many personal details than we would be prepared to hand over.

It’s for little functionality, too: things such as a weather app that lets you know what the conditions are like where you are, or the nearest fuel station.

InteriorThe CT200h’s compact exterior takes a bit of a toll on the interior.

The low, cut-in roof line will leave taller front-seat passengers banging their head on the swept sill line if they don’t duck down low enough when jumping in.

Similarly, once inside, the top of the door cuts in close to the front-seat passengers’ heads, giving the CT200h a closed-in feel.

It’s the same in the rear, where the fast-falling roofline, canted-in windows and tight legroom create a space where you’d be happier on a short, rather than long, trip.

Accommodation is much better up front, with two decently appointed, leather-trimmed front seats that hug tight and offer plenty of adjustment.

It’s when you cast an eye around the cabin, though, that the smallest Lexus starts to look a bit old compared with its fresher, sharper rivals.

Despite its luxury slant, the interior of the CT200h feels a bit cheap and plastic-heavy. The IS-style steering wheel, with its round controls for audio and phone functions is at odds with the rest of the dash, and there’s the same cruise control setting used in everything from the Toyota Yaris city runabout to the millionaire-row LS600hL V8 petrol-electric hybrid limousine.

Add to that a Radio Shack-style digital clock and a foot-operated parking brake, and the Lexus feels a bit like a fancy Corolla.

One saving grace, though, is the large seven-inch screen dominating the dash, which adds to the refinement.

However, the small Lexus carries through one of the same problems as before – a centre console designed around a mouse-like controller for most of the entertainment and navigation functions.

Making the mouse easily accessible has placed most of the other functions out of reach of the driver, meaning you have to lean forward to adjust a dial or punch a button. If that big screen was touch-sensitive, there’d be no need for the mouse.

Boot space is at a premium, with the batteries for the hybrid system concealed underneath it by a false floor. Even though the boot floor is higher, the rear seats split-fold forward and lie flat to create a more useful space.

Engine and transmissionThe hybrid-engined CT200h carries over its 1.8-litre engine producing 73kW of power. Add to that the 60kW of power from the electric motor that helps to drive the front wheels, and the little hybrid produces a peak 100kW and 207Nm of torque.

The drive arrives at the front wheels via a continuously variable transmission.

At low speeds and under a gentle throttle, the CT200h will cruise along in full electric mode for a short distance, using no fuel. Give the throttle a bit of a stab, and the engine will leap into life, providing decent acceleration as the CVT finds the engine’s sweet spot and holds revs.

Fuel use is supposed to be the big advantage of hybrid systems. Officially the CT200h will do a combined average of 4.1L/100km with carbon dioxide emissions of just 95g/km – good enough to place it ninth on the Green Vehicle Guide’s table of Australia’s most fuel-efficient, low-emissions cars – but in the real world we struggled to get that figure much lower than 7.0L/100km.

Ride and handlingAs well as the more aggressive-looking aerodynamics tweaks to the exterior, the CT200h gains a harder-riding suspension than its more luxury-focussed siblings.

In short, the ride is quite firm, turning the CT200h into a bit of a nervous tourer as it reacts to every lump and bump in the road. It’s a distraction on the everyday commute.

It shows its advantage on a twisty road, showing plenty of in-corner stability.

In fact, the chassis outshines both the engine and Lexus’s hair-trigger electronic stability control system that steps in early to limit wheel spin out of corners.

You can scroll through three different types of settings – eco, normal and sport – that remaps how the throttle, gearbox and steering all react. In eco setting, throttle response is dulled to save on fuel.

Lexus will soon have a four-cylinder turbocharged engine in its line-up the first time the luxury arm of Toyota has used forced induction as a means of gaining more power from smaller engines without the legacy of heavy batteries and an electric motor. That, in a CT200, with the F Sport pack will be something to look forward to.

Safety and servicingThe CT200h earns a five-star crash safety rating thanks to its high count of seven airbags, including a driver’s knee airbag.

Lexus vehicles are covered by a four-year, 100,000km warranty, and ownership comes with membership of the Encore Privileges Club. You gain roadside assistance, a monthly magazine, invitations to exclusive events and even access to a loan car when you have your serviced and if you don’t want it picked up and dropped off at your door. Lexus tends to have a policy of putting you behind the wheel of the next model up so that you set a future ownership target, too.

Servicing is every 15,000km. The cost is quite high for the hybrid system, so ask before you buy.

VerdictA mid-life refresh for the CT200h has made the small hybrid a much more value-driven and better-looking car than ever before. However, while it has taken two steps forward, the competition has taken two bigger strides to outpace it.

To desire the CT200h you’re going to be interested in the clever technology that drives the only compact hybrid luxury car on sale in Australia.

Otherwise, there’s better, more refined choices out there.

RivalsAudi A3 1.6 TDI (From $32,250 before on-roads)
Beautifully designed interior wrapped in a smart-looking shell, with the added appeal of a punchy diesel engine mated to a dual-clutch gearbox that’s jerky at low speeds. Options add up a bit, too.

BMW 118d (From $42,500 before on-roads)
There’s no 120d any more, so we’re left with this diesel variant hooked up to a slick eight-speed auto. Classy interior with good front- and decent rear-seat space, but rides harshly on run-flat rubber.

Mercedes-Benz A200 CDI (From $41,900 before on-roads)
Benz reset some benchmarks with this new model, and it shows with good standard kit and an engaging presentation. The ride, though, is on the firm side and the tyres tend to generate a fair bit of noise.

SpecsMAKE/MODEL: Lexus CT200h F Sport
ENGINE: 1.8-litre four-cyl, electric motor
LAYOUT: Inline 1.8L 4-cyl, FWD
POWER: 73kW@5200rpm
TORQUE: 142Nm@2800-4000rpm
TRANSMISSION: CVT
0-100km/h: 10.3secs
TOP SPEED: N/a
FUEL: 4.1L/100km
EMISSIONS: 95g/km CO2
WEIGHT: 1465kg
SUSPENSION: Macpherson (f)/double wishbone (r)
STEERING: Electric assist rack-and-pinion
BRAKES: Ventilated disc (f)/disc (r)
PRICE: From $48,990 before on-roads