THE Honda spirit is finally back – or at the very least in our midst again.

Seriously. And we’re not talking about the naff ‘Power of Dreams’ nightmare that produces Toyota-lite Civic sedans, Americana Accords and snoozy CR-Vs, but vehicles that adhere to the principles of visionary founder Soichiro Honda.

Exquisitely engineered, focussed, frugal and fun, the CR-Z can proudly stand alongside the 1964 S600, 1973 Civic, 1977 Accord, ‘80s CRXs, NSX, 2000 Insight, S2000 and the last Integra Type R as unique Honda personalities.

Yes, there are issues – chiefly one of high cost when assessing the value of the flagship $40,790 Luxury CVT as tested here, and the infuriating distortion created by the split rear window.

But we feel the latest little coupe from Japan (okay – if you call a two-year-old model ‘latest’ – why did you keep us waiting so long, Honda?) is a cracker… even with the CVT auto, even with that pricetag.

And here’s why.

Starting with its existing Jazz platform (including the MacPherson strut front and torsion beam rear suspension), Honda shortened and widened it, added a 10kW/121Nm electric motor to a variation of the VTi’s 1.5-litre four-cylinder petrol engine and fitted a set of nickel metal hydride batteries where the ‘Magic Seats’ would otherwise live in the roomy little hatchback.

You’d never guess the light-car connection looking at the styling, which unashamedly evokes the classic CRX coupes of the 1980s, albeit with a modern, even futuristic, twist.

Note that, like the disappointing Insight but not Toyota’s Prius, the company’s sixth-generation Integrated Motor Assist (IMA) series-hybrid drivetrain means pure electricity never fully drives the car alone, except in some off-throttle coasting situations.

But the upshot is that the 1190kg CR-Z Luxury is relatively lightweight, disarmingly nimble and a whole lot of fun - words never before associated with a hybrid. In fact, this is a real driver’s car.

You know, sometimes motoring journalists can know too much about a car, because previous experiences with hybrids have always led us to be disappointed with their dynamics.

Yet even a person completely uninterested in cars will assume from the design and sporty 2+2-seatr layout that the Honda is about feeling good… and they’d be right.

Time to jump inside for a drive then.

There are no nonsense buttons to push or fingerprint pads to press – just turn the key and the 1500 instantly sparks to life. Being a Honda, the silky little petrol unit is quietly unobtrusive.

Looking down at the ‘T-bar’ auto lever, you may be disappointed to find no gated Tiptronic-style manual-shift pattern, just a boring ‘PRND’ layout. But don’t let that mislead you.

Aided by an extra wad of instant electric-motor-supplied torque (167Nm combined), acceleration is strong from the get-go, pulling the little car forwards with an urge that completely belies the itsy-bitsy capacity, 91kW power peak and official 9.7-second 0-100km/h sprint time.

The whole CVT operation is seamlessly efficient too, for even though Honda has engineered seven ‘fake’ stepped ratios accessible via a handy set of steering wheel-mounted paddle shifters, the advanced electronics smother out any jerkiness for an ultra-smooth power delivery combined with a steady flow of speed.

Three modes are available – Normal, Sport and Econ (a super-frugal setting that feels too slow and neuters the air-con too).

The first is sufficient for lively everyday performance combined with exceptional fuel consumption even driven hard around town, we struggled to get our figure up beyond 7.2L/100km. Honda's official claimed average is 4.7L/100km.

Pressing ‘Sport’ alters the CVT software so the lower ratios are held on to longer for a noticeable increase in oomph (especially at take-off), which is a great thing because there is agility aplenty going on underneath to match.

How can this chassis be so closely related to the underwhelming Insight’s?

Sharp steering with a propensity to go directly where the wheel is pointed, accompanied by a flat cornering attitude, makes for a fun little runabout.

Whether the roads are smooth or not, the CR-Z grips with unshakable intent, yet feels light enough to be really and entertainingly chuckable. Rough edges don’t corrupt a chosen line and nor is there any annoying rack rattle transmitted through the wheel.

We’d like greater feedback from the wheel though, and perhaps a bit more weight too, although the standard set-up will be fine for most tastes.

Some more observations: the electronic stability control system is beautifully calibrated so even on dirt tracks it kicks in quietly and yet keeps the car under control without preventing some slippy and slidy fun.

Kudos too goes to the ride quality – a surprise given Honda’s past form at times. You’d never call it plush but there’s ample absorption and enough wheel travel for a car with such sporty intent and dynamic prowess.

But while the brakes work fine they can feel a bit grabby and artificial when crawling through traffic - perhaps it was just our particular car.

However, a bigger issue concerns road noise intrusion at speed – there is no denying that our coarse bitumen highways magnify the boomy nature of the CR-Z’s cabin. This is probably the corollary of having such an athletic chassis, but we’d still prefer it to be quieter.

Did you know the Honda is sold only as a two-seater in some markets, including the United States? We became sick and tired of explaining this to the pair of whingeing 168cm adults that had to endure a spine-deforming stint in the rear of our CR-Z. At least Honda offers the option of occasional short-trip multi-seating versatility.

With just two occupants up front the rear backrest folds flat to create a reasonable storage compartment beneath a big hatch door. For the record, it expands from a modest 225 litres to 401.

But we can’t say we’re too happy with Honda’s risible decision not to fit a return memory setting on the folding and sliding front passenger seat.

Indeed, the front seats are where all the action is in the CR-Z and if you’re a fan of Hondas new and old you are likely to be pleased with the result. Actually, terrible over-the-shoulder rear vision aside, it’s difficult to fault.

Though the (futuristically presented) dash top is rubberised, there’s enough hard black plastic festooned across the cabin to remind people of this car’s humble origins – but that’s okay since there is an element of traditional Japanese low-cost sporty coupe going on throughout the CR-Z anyway.

Anyway, the plus points are numerous.

The instruments, arranged in the modern Civic-esque way we’ve grown very accustomed to since 2006, are a colourful array of digitalism (speedo and fuel gauges as well as hybrid drivetrain display, battery charge and fuel consumption readouts) mixed with a great big centrally located analogue tachometer redlined from 6250 to 8000rpm.

If you drive frugally it glows green with glee but press on and it morphs into an electric blue, while in Sport a red tinge of disapproval appears. Novel.

The dash is uniquely presented and extremely functional, from the very ‘80s-style satellite pods for air-con/heater switches to drive mode, light and mirror controls, with face-level vents positioned exactly where you’d want them to be.

Being a Luxury model, there’s a clever all-in-one touch-screen navigation/CD/MP3/Bluetooth audio streaming and telephony system with reversing camera (plus heated leather seats and a glass roof that doesn’t open, sadly) that provides decent sound quality and easy functionality as well as a lift in overall cabin ambience.

On the subject of features, all CR-Zs include six airbags, active head restraints, the aforementioned ESC and traction control, and anti-lock brakes with electronic brake-force distribution and brake assist for a five-star ENCAP safety rating.

Honda also provides plenty of storage, a fabulously comfy and supportive pair of front seats in a spacious and inviting environment, an excellent driving position and an appropriately sporty steering wheel.

As we said, there’s little to fault in here.

The question of value is a vexing one, though, for the top version is in VW Golf GTI and Renault Megane RS250 territory from a hot-hatch point of view, or right up with the Volvo C30 DRIVe, Prius and Lexus CT200h if we’re talking eco-warriors.

And that’s not including incoming sports models like the Opel Astra GTC, Toyota 86, Hyundai Veloster and maybe even Subaru's BRZ from 2012.

But after much consideration – and weeks of driving both CR-Z versions (and we do prefer the slick six-speed manual Sport) – it is clear nothing comes close to combining lightness and efficiency in such a compellingly sporty and swoopy package.

We’d forgotten how much fun a relatively inexpensive coupe could be until now.

That’s the Honda spirit though, alive and kicking again at last.