THE irony about the previous Smart ForTwo is that it was designed to appeal to the head, yet has mostly only sold to Australians' hearts.

Huh? Well, consider this. Nose-to-the-kerb and similar parking de-restrictions that ForTwo owners enjoy in other places are not possible thanks to most local governments’ refusal to exempt the Smart.

And calls for registration and tax exemptions resulting from the ForTwo’s small footprint also fall on deaf ears.

The reality is, the odds are stacked against the Smart getting an even break in Australia.

Now, objectively speaking, with the outgoing 450-series ForTwo, without such incentives to send you scurrying into your local Smart dealer, what you were left with was a funny two-seater curio with a hard ride, sloppy gearbox, breathless performance and a noisy interior that looked like the inside of a kid’s toy – and all for grown-up small-car money.

If you thought about it objectively, the outgoing model just didn’t make any sense – which left it mostly to the heart really.

It appears that many Smart ForTwo buyers don’t cross-shop other light or small-cars, like the Hyundai Getz, Nissan Tiida or Volkswagen Golf to begin with anyway.

Instead, some choose it instead of a scooter, an expensive bicycle, a jet-ski or even renting an apartment in the city.

Some buy one out of boredom, curiosity, or for the thrill of having a European mid-engined turbo two-seater to go with their other similarly-specified exotica costing 20 times as much.

In other words, some people buy with their hearts.

Of course, there is a sizeable percentage that also like to use the Smart as a mobile billboard for their product or service, but that’s okay too since even businesses have the right to enjoy the car’s incredible manoeuvrability, sensational fuel economy, proven safety and offbeat styling, while basking in green motoring credibility.

And you can squeeze through some traffic jams park between carelessly parked cars, or tuck it into some corner of a garage.

Now, after five years in Oz and a decade in Europe, there is a new Smart ForTwo. And it still does all this stuff, despite being a little larger and a tad wider than before.

With careful honing of the old recipe, Mercedes has made it a lot more fun to drive, as well as quite involving in the steering and handling department, and a hoot to wind out to the rev-limit. And all while still being extraordinary efficient.

In fact, the new Mitsubishi-sourced 1.0-litre engine may be a third larger and significantly more powerful (especially the turbo model, which really makes its extra performance felt on the open road rather than around town), yet it is also measurably more frugal and environmental, and much more refined than before.

And that’s one of the key achievements with the model change. You no longer feel like you are sitting in a cheap and cheerful kit car. The interior has a maturity and quality feel that the last one couldn’t hope to achieve.

With only a little bit of practice, you can execute fast gearchanges via the F1-style paddle shifts or Tiptronic-style floor shifter (not recommended it’s set too far forward for comfort) without the stomach-churning jerkiness of the old Smart.

And if you fork out for the Softouch facility, the auto mode works far more smoothly (though still nowhere near perfectly) than before.

The ride is definitely smoother and more comfortable on most roads, though still a tad too choppy on some surfaces. You just can’t have something this short ride like an old Citroen, we’re afraid.

And the upshot is that the ForTwo will cruise effortlessly at the national speed limit without feeling unstable or vulnerable. This is one little car that feels normal from the B-pillar forward.

Having the added storage areas also makes the latest version a more practical buy for carting stuff around – that folding passenger seat came in use for us when we needed to carry a 1.5-metre object across town.

And topping all this off is a level of safety and security that you can expect to find in a Mercedes C-class sedan. This really is one of the safest forms of vehicular transport there is.

The thing is, the newest Smart is a car that does exactly what it says so on the tin.

No, for 99 per cent of new-car buyers out there, it is not now the size of a Toyota Yaris, as cheap as a Nissan Micra, or as normal to drive as a Suzuki Swift. If it were, the ForTwo would not be a 2.7-metre runabout for two, but just another baby car.

So we should be grateful that we have the option of buying it, because there is no other car like it on the road yet, and as we need to reconsider our impact on the world we live in, the ForTwo’s unique recipe of compactness and functionality is becoming more and more relevant.

Indeed, just a few years ago, Mercedes was seriously considering closing the whole venture down. What a mistake that would have been.

In a strange way, this car is an iPod on wheels – if fulfils a function in a very intimate, futuristic and efficient manner. Europeans get it, and have been for years, and as our roads choke and our population rockets, so will Australians - eventually.

If you don’t like or get what the concept is all about, then this car is not for you. But for the few of you who do, the Smart has improved in leaps and bounds.

And even if the bureaucrats never give an inch in terms of parking, tax or registration benefits, you might now even consider buying the 451-series ForTwo in lieu of – shock horror! – another car.

At last, then, you can buy a Smart ForTwo in Australia with your head as well as your heart.