I also drove the CVT version, which behaves pretty well. CVTs sometimes accelerate abruptly from a standing start or come to a stop awkwardly. The CR-Z lurched a bit upon launch, but it improved once the car had warmed. I also noticed smoother response if I let off the brake and waited for the engine to spin up and engage the transmission before hitting the gas pedal. Otherwise I'd catch the sleeping engine by surprise and it would jump out of bed and whack its head on the transmission, if you will. Like other CVTs, when you accelerate hard, the engine zooms to its top speed and the transmission accelerates the car as the engine drones on at a constant and rather loud level.

The CVT makes full use of the CR-Z's three-mode drive system. In both versions, Sport mode decreases the power-steering assist, and Econ mode switches the air-conditioning compressor to a more efficient cycle. With the manual transmission, the modes vary how much the car accelerates based on accelerator-pedal depression. It's more responsive in Sport, reluctant in Econ and up the middle in Normal mode. In the CVT, it varies the throttle response less and the gear ratio quite a bit.

For example, if you're cruising along and switch on Sport mode, it instantly boosts the engine speed by about 1,000 rpm, keeping the vehicle speed constant. To remind you not to stay in the mode unintentionally and waste gas, a blue ring around the digital speedometer turns red and stays that way. In the Normal and Econ modes, it starts out blue but transitions to green when you drive in an efficient manner.

Keeping the engine at higher revs makes it ready to accelerate with more power, and it provides more engine braking. Econ holds the engine at lower rpm and makes the first few inches of accelerator-pedal travel less productive. Again, Normal is in between.

If you floor the accelerator, regardless of mode, the CR-Z goes full-steam ahead. I can't overemphasize how important this is. When you need a car to go, you need it to go, and cars that rob you of full power in the name of an efficiency mode (there are some) are potentially hazardous. When you request passing power from the CR-Z at highway speeds, there's slightly more delay if you're in Econ mode because the CVT has to up the ratio and the engine needs to rev up, but this is incremental; there's no artificial limitation. In any mode with either transmission, passing power is serviceable, but again, it's not exactly sports-car material.

Anyone who wants the manual experience with the CVT can have it, thanks to shift paddles on the steering wheel, which select among seven fixed gear ratios that emulate a conventional transmission. It shifts up and down relatively quickly. You can trigger a manual selection at any time, but in Normal mode, it will promptly revert to automatic operation. When in Sport, it stays in the selected gear and manual mode unless you hold the shift-up paddle for a few seconds or change mode altogether.

It appears that the EPA estimates are conservative, as is the case with the Insight. I exceeded the automatic's highway rating with 39.4 mpg, according to the trip computer. That's not bad for a car with only 1,000 miles on it, hardly broken in. Of course, this was on flat terrain on a warm day. Other conditions might change the results.

Interior

The driver's seat has more legroom than I needed at 6 feet tall, and it has comfortable, supportive cushions with just enough side bolstering. The passenger seat, however, had too much lumbar support, and neither seat lets you adjust it. A driver's seat height adjustment is standard, and I had a little headroom to spare even with the seat raised fully. The steering wheel tilts and telescopes, which is another plus. The one omission is a center armrest, which is optional. If comfort isn't a good enough reason to get it, the cabin's lack of covered storage certainly is. There's a glove compartment, but it's tucked far under the dashboard and is hard to access even from the passenger seat.

Visibility to the front and sides is good, but out the rear is a problem. The rear pillar is high and wide, and the rear windows — bisected by a horizontal beam as they are in the Insight — are rather narrow. On the positive side, the crossbeam seems higher than it is in the Insight and Prius, so it didn't obscure cars behind me in the rear-view mirror.

The CR-Z EX's interior impressed me. We've complained about inconsistency in Honda's cabin materials, both the quality and the typical hodgepodge of textures and colors. The CR-Z is an improvement. There's low-gloss material on the dashboard and the tops of the doors, and the door handles and some dashboard trim feature a high-luminosity metal-film composite that Honda describes as a thin layer of vaporized tin under clearcoat. Pretty effective stuff.

The seats are upholstered in silver-gray mesh fabric. It looks pretty good on the doors, too, but it's a bit too coarse to be serving as armrests. The gauges are brilliant, three-dimensional luminescent affairs, including a digital speedometer at the center of an analog tachometer dial. Like the Insight, the driving mode buttons, ventilation controls and other switches rest on pods canted toward the driver. Unlike the Insight, there's no separate high-mounted gauge at the base of the windshield, which some people don't like. I was reminded that I like it because the steering wheel blocked my view of the gauge cluster.

Sometimes efficient cars are noisy. The CR-Z isn't bad. Engine noise is the most intrusive, but it's mainly under heavy throttle. Other sounds are relatively balanced: There's some road noise and occasional wisps of wind around the A-pillars, but nothing is overbearing, though a motorcycle or noisy car alongside the CR-Z intrudes through relatively thin (lightweight) side windows. One sound I couldn't help noticing was a slight hiss coming from the cargo area that I thought was static from a radio trapped between stations. Ultimately I found it was a cooling fan for the battery pack, which speeds up and slows down along with the vehicle, so it's always just barely audible. Raising the cargo partition and putting the retractable cargo cover in place seemed to quiet it down some.

Cargo

At 25.1 cubic feet, the cargo area is more than twice the volume of a typical compact car's trunk. It's not particularly tall, but it's a vast improvement over the first-generation Insight, a two-seater whose cargo floor was nearly at head restraint height. Two storage bins sit right behind the seat where a backseat would be and are separated from the rest of the cargo area by a vertical partition that can be folded forward 90 degrees to form a continuous, longer cargo floor. (The Japanese-market CR-Z has a backseat — a generous term for it — but Honda says U.S. safety regulations require rear head restraints that would stick up through the roof.)

The partition folds down in a single step, but it would be better if there were release handles on the sides rather than one in the center where it's hard to reach from outside the car. My test cars also had retractable cargo covers, which can span the entire cargo area or can be mounted on the floor about a foot in front of the rear bumper. This configuration creates a small compartment, but the whole space looks empty when viewed from the outside.

Safety

As a brand-new model, the CR-Z hasn't been crash-tested yet. Standard safety features include frontal, side-impact and curtain airbags and active head restraints. Also standard are antilock brakes with discs at all four corners and an electronic stability system with traction control.

CR-Z in the Market

The CR-Z is in the middle in many ways, including sportiness and mileage. At least Honda is pricing and positioning it in the middle, too. Though it's less efficient than other hybrids, it's also cheaper. It's more expensive than some sporty cars, but in those cases it's more efficient.

Potential competitors are an eclectic mix, and few match the CR-Z in more than one attribute. Among larger two-doors, the Civic's performance-oriented trim level, the Si, is close to $23,000 with the destination charge, and the Ford Mustang and Hyundai Genesis coupe start above $22,000.

The super-fun Mazda MX-5 Miata similarly comes nowhere near the CR-Z's mileage, and it starts at more than $23,000. With the retractable hardtop, which makes it more like a coupe, it's close to $28,000.

On some level, the two-door, 36-mpg-combined Smart ForTwo is a competitor, but ... don't make me laugh. (Smart ForTwo review.)

In my opinion, the CR-Z's greatest two-door competition comes from the Mini Cooper, modestly powered in base form at $19,500 with destination. With an EPA-estimated 32 mpg combined (manual) and 28 mpg (automatic), it's at least knocking at the CR-Z's door. For anyone who's willing to consider diesel, the Golf TDI delivers 34 mpg combined. It starts at $22,905 with destination, but a $1,300 tax credit knocks it down to $21,605.

Honda sold 20,000 CR-Zs in four months when it went on sale in Japan, but Japan is less power-hungry than the U.S. In some ways I think Honda would have been better off downplaying the hybrid aspect and presenting the CR-Z as an efficient little car that happens to be a hybrid. When shoppers hear "hybrid," I think they expect more — more mileage, or at least more space, seats or sportiness for the mileage the CR-Z offers.