The radical design of the city-coupe, now renamed fortwo, is still remarkable. But doing things so differently comes at a price in terms of winning over public tastes and in the technological challenges.

The city-coupe drew flak in its earlier life for its poor ride quality, lack of transmission refinement, wheezing engine and a tendency to understeer.

Smart reacted last year by introducing the second generation fortwo and cabrio with modifications. The fortwo turbocharged engine boasts more power and torque and complies with Euro IV exhaust standards set to become law in January 2006. Engine capacity has increased from 599cc to 698cc with torque up 14%. The cars are available with two power ratings, 50bhp and 61bhp (cabrio only) instead of the previous 44bhp, 54bhp and 61bhp.

Carbon dioxide emissions are unchanged at 113g/km, so the car retains a key selling point for fleets – until March 31, 2008, businesses can claim a first year allowance of 100% (enhanced capital allowances) on business cars which emit less than 120g/km CO2.

Technological enhancements include the addition of electronic stability programme (ESP), including hydraulic brake assist (HBA), hill start assist (HSA) and acceleration skid control (ASC).

Prices across the fortwo coupe and cabrio ranges have increased by £30 for the cabrio pulse 61bhp which now retails for £9,995 on-the-road, and by £295 for the entry model fortwo 50bhp, now £6,560. Our test car was the passion spec – costing £8,213.

Standard equipment across the range includes a service indicator, touch sensitive indicators that flash three times for lane changes and automatic hazard warning light and interior light activation in an accident. Extras include electric power steering, cruise control, speed limiter and steering wheel-mounted gearshift as well as alloy wheels in pulse and passion ranges.

The smart is just 2.5m long and little more than 1.5m in height and width, but the large amount of glass and generous headroom mean it's still roomy for driver and passenger, with supportive, comfortable seats. Build quality is mostly good, but some cabin parts are flimsy.

The engine needs careful handling. It's easy to redline on the rev counter if you are after rapid progress and with the engine behind you, the rise in engine note is all too obvious.

The ESP was tested during a blustery weekend. You can be confident on corners, but driving on open roads in a crosswind will test your nerve.

It's worse if you're trying to get used to the automated six-speed transmission. Luckily you can switch from manual to auto at the touch of a button.

Verdict

I love the mix of sensible (fuel economy, price, low CO2 emissions, inner city savvy) with the wacky. The enhancements in the second generation make it more attractive and safer. You'll have to weigh up ease of parking, fuel economy, low BIK bill and uniqueness against lack of luggage space, an irascible engine, steep transmission learning curve and … folks pointing at you!

Engine (cc): 698
Max power (bhp/rpm): 50/5,250
Torque (lb-ft/rpm): 59/1,800
Max speed (mph): 84
0-62mph (secs): 18.3
Fuel consumption (mpg): 60.1
CO2 emissions (g/km): 113
Fuel tank capacity (litres/gallons): 33/7.3
Transmission: sequential automated six-speed
Price: £6,560 - £14,210