HONDA’S born-again Insight nameplate has been a smash-hit since it was launched in Japan almost two years ago and, after a day’s drive in varied conditions in southwest Queensland this week, we can see why.

A far cry from the pioneering petrol-electric Insight, a seemingly space-aged two-door with a 1.0-litre triple-cylinder engine and a near-$50,000 pricetag that attracted little more than 50 Australian buyers between 2001 and 2004, the reincarnated Insight brings better performance and handling in a more conventional five-door hatchback body for almost $20,000 less.

Yes, the new Insight still heralds its environmental friendliness with unique dedicated-hybrid styling and badging, but offers greater flexibility than Honda’s mainstream petrol-electric model, the Civic Hybrid, thanks to a split/folding rear seatback that extends the versatility of its wide but shallow boot.

Honda is quick to point out that, despite the exclusively Australian fitment of a temporary spare wheel/tyre under its flat load floor, the Insight’s 400-litre luggage capacity is practically the same as that of the Toyota’s now-iconic Prius hybrid and returns fuel consumption as low as many smaller city-cars that offer only four seats.

The Insight also feels about as quick – or should we say slow? – as the larger-engined Prius, vindicating independent US testing that found the Honda to be about one-tenth slower than the Toyota to 100km/h, with both models on the tardy side of 10 seconds.

However, setting the Insight most convincingly apart from its most direct competitor – and most small cars – is its electrically assisted rack-and-pinion steering, which is well weighted at all speeds, offers European-like in its turn-in response and remains almost completely unfettered by the sort of road rubble that would have the Prius tiller flinching in your hands.

It did require constant correction to keep tracking in a straight line on the freeway against a strong, blustery crosswind but, overall, the Insight steers more like a Lexus CT200h than a Prius.

Ride quality was good too, even on the pock-marked surfaces west of the Gold Coast, with a degree of suspension shock on some sharp-lumped surfaces generally tending towards by compliance on most roads, although pushing on sees the Insight keel over fairly quickly as bodyroll sets in relatively early.

There’s just enough power from the electrically assisted 1.3-litre engine to extract a hint of torque steer while turning at low speeds, but that’s probably due to the Jazz-sized 15x5.5-inch wheels and 175/55-15 tyres fitted to the entry-level VTi model we drove.

No VTi-L models were available to test at the launch, but we’d expect the flagship Insight’s larger 16x6.0-inch wheels and 185/55-16 tyres to offer more grip.

Like the Prius, the Insight tends to deliver more noise than acceleration when you floor the throttle. You can feel the extra urge of the electric motor from idle, making the Insight quicker off the line than any 1.3-litre vehicle and providing a welcome dose of midrange assistance during part-throttle driving on the open road or a round town.

But when full-throttle acceleration is called for during overtaking manoeuvres or inner-city traffic light drags, the Insight’s CVT auto – like the Prius’s – sends the tacho needle spinning to its 6000rpm redline, where it remains while your right foot is buried, accompanied all the time by enough engine noise to drown the tyre roar on coarse-chip pavement.

No, the ‘slipping clutch’ impression is no worse than in any other CVT-equipped car, and at least the Insight – unlike the Prius - comes as standard with tactile steering wheel shift paddles, which if nothing else allow you to vary engine speeds manually over seven separate ratios and deliver some handy engine braking around town or down hills.

Our car averaged 5.8L/100km over the launch loop, after hovering around the low sixes for most of the undulating drive, but some journalists easily bettered the Insight’s official average of 4.6L/100km by paying strict attention to the speedo, the background of which turns from blue to green when you lift off.

That’s quite a bit higher than the Prius average of 3.9L/100km, but we doubt there would be much difference outside of exclusive city driving. Either way, Honda’s claim that the Insight is 37 per cent more fuel-efficient than an equivalent small petrol car seems highly plausible.

In typical Honda fashion, the Insight features impeccable Japanese build quality and a futuristic interior design that is as individual as its exterior styling - which features a relatively slippery 0.28Cd coefficient of drag - even if its ‘Aero Athlete’ exterior design proportions appear remarkably similar to Prius from the rear and in silhouette.

Touch the cabin surfaces, however, and it’s clear everything inside the Insight is harder than it looks, including the matt-grey dashboard and textile-covered centre and door armrests.

Surprisingly for such a cutting-edge vehicle, a conventional ignition key and hand brake are fitted, although we don’t mind either old-fashioned device in a world of automatic/electric parking brakes and keyless push-button starting, even in small cars.

The cloth-trimmed seats offer some lateral support but felt firm on this tester’s lower back and although the steering wheel is adjustable for both reach and rake, it needs to be positioned between the upper digital speedo display and the lower instrument panel in order to see both.

There’s plenty of legroom and headroom up front but the same can’t be said of the rear, which is only average in the small-car class, while only children should apply for the centre rear position, which has a seat base so heavily humped that it won’t accommodate an adult.

Vision is generally good, but the lower glass section of split tailgate is tinted and became so grotty with roadworks spray we could hardly see through it, severely limiting rear vision.

While we’re complaining, the lack of a one-touch indicator function (which Toyota also continues to overlook) is disappointing and the tacky Bluetooth control unit on the driver’s A-pillar looks like an after-thought.

Large front door pockets with bottle holders, a high-opening rear hatch, a 60/40-split rear seatback that folds almost completely flat and a luggage cover that stows cleverly underneath the boot floor make up for the small unlockable glovebox.

Honda says the Insight’s Prius-style nickel-metal hydride battery pack, which is 98 per cent recyclable and warranted for eight years/unlimited km but allegedly good for 15 years/240,000km, costs about half as much as that in the Prius at $1875.

It also points out that any Honda dealer can service the Insight, at a cost of $250, every 10,000km, though buyers must pay an extra $475 for metallic paint – even on the top-shelf VTi-L, which is expected to account for two-thirds of sales.

So the Insight all but matches the Prius’ super-low fuel consumption and is a more rewarding car to drive while offering the same five-door hatchback flexibility and five-star safety, with just a few foibles.

As an added bonus, Honda’s dedicated hybrid also happens to be $10,000 more affordable than Toyota’s hybrid hero.

Australians have a track record of refusing to pay extra for lower fuel consumption, however, and the Insight faces some formidable competition in the circa-$30,000 premium small-car class alongside models as slick as Volkswagen’s diesel Golf.

If nothing else, the Insight is a welcome new alternative for those that not only like being green, but like being seen to be green.