We like
Generous standard features list, hybrid fuel efficiency, luxurious cabin, compliant ride, quiet cabin

Room for improvement
Rear-seat leg and head room, lazy acceleration, higher entry price compared with rivals

WHEN Lexus launched the CT200h in Australia in 2011, its direct competitors in the premium small hatch segment were limited to the BMW 1 Series, Alfa Romeo Giulietta and the Audi A3 – aside from the more style-oriented two-door offerings such as the Mini hatch and Volvo C30.

Much has changed in the three years since the Japanese luxury marque was proudly touting its hybrid-only luxury hatch. Early last year, Mercedes-Benz released its highly anticipated new A-Class that offered a dynamic drive and entry to the three-pointed star brand from a starting price of $35,500 excluding on-roads that undercut its German rivals.

Not to be outdone, BMW responded by adjusting its pricing to match the Benz, while Audi launched its new A3 last year starting from $35,600, leaving Volvo's V40 and Lexus' CT200h as the more expensive options in the segment.

Rather than lower the price to appeal to buyers who might only have shopped around the Germans, Lexus decided to maintain the $39,990 opening price for its updated CT range that arrives in showrooms this month, albeit with significantly improved value.

The formerly mid-spec Prestige variant is gone, with the new, more generously specified Luxury base variant effectively replacing it.

In $39,990 Luxury guise, the CT includes dual-zone climate control, drive modes that switch between “eco” and sport, hill-start assist, advanced Bluetooth and a reversing camera as standard. Lexus pointed out that some CT200h rivals still offer these items as options.

Pricing and specification rise to $48,990 for the F Sport and top out at $56,990 for the Sports Luxury. Lexus offers enhancement packs for the base and mid-spec variants that add features including sat-nav, digital radio and a smartphone-based app platform to a sunroof, and range in price from $3250 to $9750.

Styling changes are mostly subtle and include a new rear bumper, LED daytime running lights on some variants and a contrasting black roof on F Sport variants, but the biggest change is the inclusion of the now familiar ‘spindle’ grille that dominates the front.

In F Sport guise, with the sexy mesh grille, the CT is transformed from a conservatively designed luxury city runabout to a flashier, more aggressive looking hatch.

It might be difficult to spot the difference, but Lexus has refreshed the cabin with a new IS-style steering wheel, fewer buttons in the centre stack thanks to the upgraded seven-inch Lexus Display Audio, while any variant fitted with sat-nav (optional on Luxury) gains the second-generation version of its Remote Touch controller in the centre console.

New trim colour choices are available, and Lexus has maintained the cockpit-like design of the original CT including the high-set gear-shift lever that takes some getting used to.

The CT200h feels low to the ground upon entry and egress, giving the impression of a sportier model, but the cabin is luxurious and visually appealing, even in base Luxury guise. The standard cloth trim in the Luxury (leather is a part of an enhancement pack) looks and feels like Alcantara and the seats provide excellent lumbar support and cushioning, although bigger boned occupants may find them a tad snug.

Parting with the extra $9000 for the F Sport or $17,000 for the Sports Luxury over and above the Luxury adds high-quality leather trim, with the stunning Dark Rose that is available exclusively on F Sport variants easily the pick out of the three leather-accented interior options.

Lexus has clearly tried to align the cabin of the CT with its stylish IS sedan stablemate, following positive reviews and strong sales for its bigger brother since its launch midway through last year.

While the CT’s cabin is luxurious and provides a cosseting feel, rear visibility is compromised thanks to a small rear window and massive C-pillars, while the cabin feels a little cramped. Despite being longer and higher than the A3, A-Class and 1 Series, the CT has a shorter wheelbase (2600mm) than its rivals and is narrower than all bar the BMW that it matches (1765mm).

Up front the narrow beam is less noticeable, but some time spent in the rear seat highlighted the CT’s shortcomings. A low roofline makes for restricted headroom for anyone taller than 162cm and a long-legged occupant in the front will compromise rear legroom.

A quick glance at the cargo area – it hides a nickel metal hydride battery under its floor -- and the low roof height gives the impression that the CT200h is not capable of carrying much of a load, but it is deep and offers a 375-litre capacity with the rear seats up, increasing to 985L with the seats down.

The A3 offers a more generous 380L/1200L folded, while the BMW can fit up to 360L/1200L and the Mercedes offers 341L.

The five-star ANCAP rating that Lexus achieved back in 2011 remains, although the Lexus now adds a standard reversing camera. Eight airbags are also standard while a pre-collision safety system and adaptive cruise control is available as an option on higher-spec models.

Under the skin, Lexus engineers have made a number of improvements to the CT200h including tweaks to the suspension set-up and steering.

Press the start button and there is little to hear as the petrol-electric drivetrain kicks into electric mode. Low-speed driving in congested inner city traffic keeps the CT in EV mode, so it is difficult to notice the impact of the changes Lexus made to improve NVH.

A press of the throttle and the 1.8-litre four-cylinder Atkinson cycle petrol engine winds up, producing an output of 100kW/142Nm when combined with the electric motor.

We started our drive in the base Luxury variant with the drive mode set to Normal, which makes for lacklustre in-line performance. The throttle response is slow and take-off uninspiring, while the standard continuously variable transmission (CVT) makes the engine whine when it is pushed, making for an unappealing aural note from the engine bay.

Lexus claims a 10.3-second 0-100km/h dash, and we are inclined to believe them.

Aside from some road noise, the NVH changes have improved the overall quietness of the cabin, making for a more refined car.

Switching to Sport mode, which Lexus says increases throttle response and the transmission, gave a noticeable improvement in the straight-line performance.

It is not exactly electrifying performance, but it gives the little Lexus a boost and is the driving mode of choice for anyone after a more spirited experience. Unlike driving modes in some other vehicles, the version in the CT does not alter the suspension set-up or the steering.

Lexus has added new coupling nuts to the steering column to enhance the feel and increase rigidity. The work has paid off with the CT offering nice weight and direct, sharp turn-in.

Stiff suspension was a criticism of the CT when it launched in 2011, but Lexus has made changes to the set-up including revised shock absorbers and coil springs, and larger front and rear stabiliser bars.

The CT offers flat cornering and a compliant ride, with the suspension updates striking a balance that means it can soak up bumps and corrugations without drama while still provide an engaging ride.

Even on the wet, twisty roads to the north of Sydney, the CT never lost its composure, maintaining grip from the 16-inch wheels (17-inch on F Sport and Sports Luxury).

The F Sports gains unique shock absorber damping and spring rates that increase the damping force at high speeds, making for a slightly sportier ride.

This may not be much of a concern to most CT buyers who are more likely to tackle the urban jungle rather than throw it around corners.

Lexus claims an impressive average fuel consumption figure of 4.1 litres per 100 kilometres, and on our brief stint in the hybrid hatch we managed 5.6L/100km.

A number of competitors now offer diesel models with comparable fuel figures, including the BMW 118d with 4.5L/100km, the Mercedes-Benz A200 CDI on 4.6L/100km and the even more frugal Audi A3 TDI that sips 3.9L/100km. However, none of them can match the 95g/km CO2 emissions of the Lexus.

The engineering updates to the CT200h have improved the hybrid hatch but it is still not as engaging a drive as its rivals, notably the Audi A3 and Mercedes-Benz A-Class.

If this is not a major concern, then the CT200h will surely appeal to buyers looking for a refined, classy small luxury car with one of the most generous standard features list in its class.