With the launch of the new Honda Civic hatch, Honda Australia says it finally has a serious player in both the small sedan and hatchback segments.

When the previous-generation UK-built Honda Civic hatch (then called the Si) was introduced in 2009, it came with a stratospheric $38,990 price tag that few could justify. Two years later, Honda slashed $9000 from the price, but the cut could do only so much, with few more than 2000 Civic Si hatches finding homes after three years on sale.

But Honda says things have changed with the ninth-generation Civic hatch. Forget three years – Honda Australia is looking to beat the old sales figure in more like three months, with company director Stephen Collins setting a target of selling 1000 Civic hatches per month by the end of 2012.

The sharpened pricing will play a big role in that. The new Honda Civic hatch starts at $22,650, making it $7340 cheaper than the old model, and more than $16,000 cheaper than the price of the entry-level Civic Si less than 18 months ago.

The $22,650 price tag gets you the six-speed manual Civic VTi-S, while optioning in the five-speed automatic transmission adds $2300. At those prices, the base model hatch competes with the likes of the Ford Focus Ambiente ($21,990 manual/$24,290 auto), Hyundai i30 Active ($20,990/$22,990), Mazda3 Neo ($20,330/$22,330) and the Volkswagen Golf 77TSI ($22,990/$24,490).

The high-grade, auto-only Civic VTi-L tops the range at $29,990, lining up against the Focus Sport ($30,190), i30 Premium ($29,990), Mazda3 SP20 Luxury ($30,990) and the Golf 118TSI ($31,990).

The Civic VTi-S comes standard with alloy wheels, LED daytime running lights, climate control and USB connectivity, but crucially misses out on cruise control and Bluetooth phone connectivity (the former is not available at all, the latter only as a dealer-fitted option). They’re unfortunate oversights given both are standard in the $20,990 base model Civic sedan, which is sourced from Thailand.

The VTi-L makes amends, adding cruise control with speed limiter and Bluetooth with audio streaming, along with a host of other features including larger alloys, auto headlights and wipers, rear-view camera, dual-zone climate control, leather upholstery, heated front seats, alloy sports pedals and an enhanced seven-speaker audio system. Unfortunately, there’s no satellite navigation, and reverse parking sensors are optional. (Read our breakout story for a full wrap of the 2012 Honda Civic hatch’s specifications.)

The Honda Civic hatch is powered by a retuned version of the old model’s 1.8-litre petrol engine, which is also shared with the base model Civic VTi-L sedan. The four-cylinder unit produces 104kW of power and 174Nm of torque (up 1kW from before). While its performance feels much the same, numerous efficiency improvements within the powertrain and in other areas (aerodynamics, tyres, brakes, etc.) have helped reduce fuel consumption in the auto by 10 per cent (now rated at 6.5 litres per 100km on the combined cycle) and the manual by 12 per cent (6.1L/100km). The ‘Econ’ button on the dashboard tempers the enthusiasm of the throttle, air conditioning and alters the gearshift map to help the achieve optimum efficiency.

The engine itself is imbued with a number of typical Honda traits. It’s almost silent at idle, feels responsive off the mark and is effortlessly refined as the revs rise, and rise, towards the redline. With peak torque not available until 4300rpm, however, the Civic feels heavy and restricted as you push on towards freeway speeds, and labours with overtaking manoeuvres more than you’d expect.

The six-speed manual allows you to get the most out of the engine, which feels at its most nimble and receptive when you hang onto gears beyond 3000rpm. The gearstick moves smoothly and assuredly between cogs, although the clutch pedal lacks a meaty bite point, detracting from the sense of connection between man and machine. Its additional ratio over the auto allows the engine to relax more at high speeds enhancing cabin comfort.

The five-speed automatic shifts seamlessly while still allowing the engine to rev contentedly. It shifts down intuitively on declines, although the engine can become uncharacteristically loud when the gearbox drops back a couple of gears on uphills or when you sink the boot in. The steering wheel paddle shifters allow you to have a little more fun, and in ‘Sport’ mode the gearbox will obediently shift to and hold your selected gear until you flick to the next.

While competent and planted around town, the Civic hatch has taken few steps forward dynamically from the old model. The compact wheel feels nice between your hands but offers little feedback. It’s also vague around dead centre at higher speeds and lacks weight upon turn-in, leading to understeery performance through corners.

Ride over both clean and coarser surfaces is impressive and the suspension sorts out potholes with relative ease, but the impression of refinement is not helped by road noise from the tyres, which becomes more intrusive as the road quality deteriorates.

Those who sit close to the wheel will feel embraced by the cockpit-themed, driver-focused cabin, although my long-legged co-driver on the drive program complained the steering wheel obscured his view of the digital speedometer (the only one as there is no analogue display) and was forced to position the wheel lower than felt comfortable. Forward visibility is aided by thin A-pillars, although chunky C-pillars and the crossbeam that splits the rear window in two obstruct the view out the rear. The crossbeam is thinner and lower than before, however, and the addition of a rear wiper does wonders in the wet.

The fighter jet-inspired plastic-encased instrument cluster of the old model makes way for a more conventional, colourful three-binnacle layout. The ‘i-MID’ display is positioned centrally alongside the speedo, giving a clear view of all trip information, fuel consumption, audio and climate control functions. The centre stack has a simple design with large, user-friendly buttons.

Soft-touch plastics cover the deep dashboard and front and rear window sills, while an assortment of materials and textures inject vibrancy and character to the high quality cabin. There’s enough head and knee room in the back for two adults, although still no rear vents for those hot summers and cold mornings.

The Honda Civic hatch’s 390/400-litre boot is among the largest in the small segment, and can hold as much as 1130 litres of cargo with the 60:40 split-fold rear seats folded completely flat. The rear seat bases also have a neat party trick, folding upwards against the seatbacks to create tall loading space from cabin floor to roof, perfect for transporting pot plants or a small coffee table.

Safety is on par with the mainstream competition, with six airbags (dual front, side and curtains) and electronic stability control contributing to a five-star ANCAP safety rating.

Like all Hondas, the Civic hatch is covered by a three-year/100,000km warranty.

The Honda Civic hatch is once again a relevant competitor in the small-car market. The spacecraft design elements may be gone – notably the triangular tailpipes, rocket ship door handles and asymmetrical windscreen wipers – but so too are the astronomical prices of the old model. The engine revs sweetly and the cabin is practical and lively, although the Civic hatch is still a long way from the dynamic refinement of the Golf and the Focus, and trails the i30 for standard equipment and overall value.