The all-new fourth-generation Honda City will start $500 cheaper than the model it replaces when it goes on sale locally from mid April.

Honda City - 2

Starting at $15,990 for the Honda City VTi five-speed manual, the new range undercuts its predecessor's $16,490 entry point. At $17,990 the City  VTi automatic sedan – now employing a continuously variable transmission rather than a five-speed automatic – is also down $500.

Topping the range at $21,390 is the VTi-L CVT, which is down $100 on the previous model.

Featuring a brand-new platform and an improved 1.5-litre four-cylinder petrol engine with 88kW of power at 6600rpm and 145Nm of torque at 4600rpm, Honda claims a combined cycle fuel consumption of 5.7 litres per 100km – down 14 per cent.

Honda City - 1

All variants come standard with a reverse-view camera and the brand’s Display Audio infotainment system that features smartphone-style applications and Siri Eyes Free voice control functionality.

Cloth seats, cruise control, a four-speaker stereo, Bluetooth connectivity with audio streaming, hill start assist (CVT only) and 15-inch steel wheels are also standard equipment.

The VTi-L gains front fog lights, a brushed chrome front grille, electrically retractable chrome door mirrors, climate control air conditioning, keyless entry and push-button start, leather-wrapped steering wheel with paddle shifters, six-speaker audio and 16-inch alloy wheels.

An additional $1000 launch edition Sports Pack adds a 'Modula' bodykit comprising front and rear under spoilers, side skirts and a rear spoiler as well as more stylish grille. Metallic paint is also available for $495.

With identical exterior dimensions (4440mm long and 1695mm wide) to the old model, Honda says a 50mm wheelbase increase has helped the new City gain more shoulder-, leg- and head-room. The company also claims the City has a class leading 536-litre boot – up 30L, and larger than cars such as the Mazda 6 mid-size sedan.

The new City marks the first of a trio of new Honda city-sized models set to launch locally in the coming 12 months. The all-new Jazz hatchback on which the City is based is due in mid-2014, while its crossover spinoff - known in Japan as the Vezel but expected to revive the HR-V name locally - arrives early in 2015.

2014 Honda City manufacturer's list pricing:

Honda City VTi manual – $15,990

Honda City VTi CVT – $17,990

Honda City VTi-L CVT – $21,390

Honda City VTi-L CVT with launch edition Sports Pack – $22,390