Its short wheelbase makes it able turn on a dime -- that 8.75-metre turning circle is the cat's meow in the city -- and makes the little car ride rough over road irregularities at highway speeds, although that isn't a problem around town.

Another major change is the adoption of a 1.0-litre gasoline engine, replacing the 800-cc diesel. Its 70-horsepower and 68-lb-ft of torque is a far cry from the 40-h.p. diesel. While 0-100 km/h acceleration times have improved, down to around 13 seconds, it does not seem that much faster. Then again, if you are buying a car for its gas mileage, would you care how fast you can go? Maximum speed is a respectable 145 km/h.

There might be more power, but at 100 km/h, the engine is turning over at a fairly high 3,000 r.p.m. Passing should be attempted with patience and prudence, as even a hefty stomp on the accelerator produces little forward movement until it gathers speed.

The transmission, the weak link in the last generation fortwo, is improved but is still lacking. The five-speed "automated manual" (as described by Mercedes) has two modes -- a full automatic or manuamatic. When left in full automatic, shifts are defined by a one-second pause as the car changes gears. In that pause, all forward motion seems to cease. The transmission then shifts, and you're on your way again. This results in a pronounced see-saw action no matter how gently you drive.

It’s unlike any automatic transmission on the road and takes a bit to get used to.

When you shift manually, the see-saw sensation is eliminated -- and it's more fun as well. Twin paddle shifters on the steering wheel found on the deluxe model are an alternative way to go.

Compared with the outgoing model, the interior is a lot more conventional. The central speedometer incorporates a multifunctional display for everything from fuel to service-interval reminder. The centre console contains the ventilation and audio controls. There are two cubbyholes beside the steering wheel as well as door pockets and a small glovebox. Twin cup-holders are found on the floor ahead of the shifter.

The passenger seat folds down for long objects, but several indents on the way down make its use awkward. The lever to release the seat is on the inside, making its use from outside the car difficult.

Much has been said about the Smart's safety despite its size. Front and seat-mounted head/thorax side air bags, anti-lock brakes, traction control, a vehicle stability system and tire-pressure monitors are all standard equipment.

The fortwo is also available as a cabriolet with a glass rear window.