The fourth-generation Subaru Impreza is perhaps the most civilised model in the Japanese company’s history. Featuring the latest in fuel saving technology, safety and modern styling inside and out, the latest Impreza is sure to be a top contender in the small car category.

Powered by a new-generation 2.0-litre four-cylinder boxer engine, the Subaru Impreza sedan and hatch range is good for 110kW and 196Nm of torque, exactly the same as the previous model (although torque and power delivery are different through the rev range).

Subaru offers a choice between a six-speed manual (compared to a five-speed in the previous model) and a continuously variable transmission (CVT), which replaces the ancient four-speed automatic.

From the outside the new Impreza is certainly not as controversial in its styling compared to the previous model’s rather bland look. Its modern, sharp lines and edgier design are a welcome change but we wouldn’t go as far as to say it’s the best looker in class. The recently launched, Impreza-based Subaru XV has a more cohesive look in our opinion.

Subaru has equipped all three Imprezas variants with auto start-stop, a feature we’re more used to seeing in European cars. In fact, the new Impreza becomes the first car in the small car segment to feature the fuel-saving technology across the range. The system works by switching the engine off automatically when the Impreza has idled for more than half a second, an ideal outcome in heavy traffic situations. The instant the brake pedal is released the engine auto-restarts and away you go.

The idea is to save fuel when you’re stationary (the old belief that engines use more fuel to restart than they do to idle doesn’t apply to modern cars) but in such a manner that it’s seamless and smooth. The onboard computer can also work out if engine operation is required for occupant comfort (e.g. when it’s blistering hot and the air-conditioning needs the extra power).

It sounds rather complicated but after a day or two behind the wheel you won’t even notice it’s taking place. Subaru’s multi-function display is also clever enough to show you just how much fuel (in milliliters) you’ve saved during your auto start-stop, justifying its existence.

The Subaru Impreza range starts from $23,990 for the Impreza 2.0i, the same starting price as the outgoing model. An additional $2500 will get you a CVT automatic while the mid-spec Impreza 2.0i-L starts from $26,990 (+$2,500 for auto). The top-of-the-range, CVT-only Impreza 2.0i-S will set you back $31,490.

We started our review of the new Subaru Impreza range in a top spec i-S with the optional $4000 kit that includes sunroof, satellite navigation, leather trim and powered driver’s seat.

Subaru is adamant that its all-wheel-drive (AWD) technology is superior to the array of front-wheel-drive (FWD) contenders. There is some validity to this but given the advancements in FWD technology, the AWD advantage isn’t as great it once used to be.

Furthermore the Impreza’s AWD systems differ vastly between the manual and CVT. In the Impreza manual the AWD system is mechanical, meaning power split is 50:50 front and rear, which can change if either end loses traction. In that scenario the viscous coupling automatically directs torque to the appropriate end for better acceleration. In the CVT, however, it’s entirely electronic. When on the highway it’s more than likely that 95 percent of the driving force is directed to the front wheels, this can still go down to the manual’s 50:50 front/rear split when needed but around the twisty roads of Adelaide, we felt the two to be noticeably different cars.

The Imprezaʼs CVT transmission, like all transmissions of its type, is rather noisy. Placid driving will present little to no noise issues but give the accelerator a bit of a nudge and the whining sound begins. It’s an unfortunate side effect for a system designed to extract the most out of the engine with maximum fuel efficiency. Around town its docile and very easy to live with but expect to be pushing hard on the accelerator pedal if you intend to overtake.

With 80 percent of Impreza buyers expected to take up the CVT option, Subaru’s efforts have been blatantly focused on fuel economy – which is evident in light of the car’s five-star green vehicle guide rating. This is great news if the 6.8L/100km fuel economy figure is appealing to you, but on the whole we felt the transmission to be a tad underwhelming and the AWD system not as confident as we’ve come to expect from a Subaru. Its behaviour does improve when you use the steering wheel-mounted paddles (that engage preset gear ratios), but it’s by no means as engaging as the dual-clutch systems found in the Volkswagen Golf and, to a not quite as successful degree, Ford Focus.

The six-speed manual on the other hand is reminiscent of the first- and second-generation Impreza we’ve come to love. It’s the sort of mechanical connection between the driver, gearbox, engine and wheels that exerts enormous confidence. Around Adelaide’s hilly countryside we felt the manual Impreza to be more surefooted in and out of corners and certainly a better fit for Subaru’s “All 4 The Driver” mantra. It does have its problems, though, with torque holes through the rev range requiring regular gearshifts to tackle hills. The dash from 0 to 100km/h takes 10.5 seconds in the manual and 11.1 seconds for CVT models.

It’s a case of fuel economy taking absolute precedence. Subaru engineers could well have extracted better performance and acceleration from the gear ratios but only at the expense of fuel economy. For the everyday driver using the new Impreza for urban commutes, power delivery in both manual and CVT is more than adequate. As for handling and ride comfort, the Impreza performs well. With a centre of gravity even lower than the current supercar-killing Subaru STI (and not much further behind the Porsche Cayman S), the Impreza sits flat around bends without compromising comfort around town.

On the inside it’s very obvious that Subaru’s interior design team has finally learned its lesson. Soft-touch, high-quality plastics cover the dashboard and doors while the overall cabin ambience, even in the base model, is a significant improvement over the outgoing Impreza (and even superior to the current Liberty). The multifunction display (which gets a nice full-colour upgrade from the base to mid spec and high-end models) can be rather useful as it displays a variety of information about the vehicle. Bluetooth phone connectivity and audio streaming is standard across the range, as is native iPod/iPhone connectivity.

The Impreza offers a good seating position for the driver and forward visibility is top notch thanks to a low bonnet and an open, well-designed cabin. Speaking of which, cabin space has been marginally increased and there’s now just enough room to comfortably accommodate four large adults, even for long drives.

You may be thinking the new Subaru Impreza’s $23,990 starting price isn’t exactly cheap, given it comes with steel wheels and little other luxuries. Subaru insists it doesn’t want to compete in the cheaper part of the small car segment, and it has aimed to compensate with extra equipment.

For example, Subaru doesn’t charge for metallic paint or the DataDot technology that discourages thieves from stealing your car. Then there’s the AWD system, which provides more confidence on slippery roads. The company believes the AWD system adds at least $2000 in value to each Impreza.

Subaru has built the Impreza from top quality high-tensile steel and packs the cabin with seven airbags standard (including knee airbag), and it has received a five-star ANCAP safety rating. It’s also inherently a Subaru, so it will more than likely drive on till the end of time without a hint of complaint.

The new 2012 Subaru Impreza joins the most competitive segment in the Australian market at a time when more and more buyers are downsizing from large to small cars. It’s outdone in the performance category by the likes of Volkswagen Golf, Mazda3 and Ford Focus, but it presents an excellent alternative to the front-wheel-drive candidates. Be it in sedan or hatch (same price), the new Impreza is a vast improvement over the old in every category we can think of.

Subaru Impreza pricelist:

• Impreza 2.0i six-speed manual $23,990
• Impreza 2.0i Lineartronic CVT $26,490
• Impreza 2.0i-L six-speed manual $26,990
• Impreza 2.0i-L Lineartronic CVT $29,490
• Impreza 2.0i-S Lineartronic CVT $31,490

Subaru Impreza servicing costs (manual/CVT):

• 6 mths or 12,500 –  $259.00 / $260.41
• 12 mths or 25,000 - $259.00 / $260.41
• 18 mths or 37,500 - $336.42 / $337.84
• 24 mth or 50,000 - $465.96 / $433.72
• 30 mths or 62,500 - $259.00 / $260.41
• 36 mths or 75,000 - $336.42 / $337.84
• 42 mths or 87,500 - $259.00 / $260.41
• 48 mths or 100,000 - $333.23 / $334.65
• 54 mths or 112,500 - $733.70 / $700.04
• 60 mths or 125,000  - $801.59 / $801.59

More information on Subaru Impreza specifications