The Lexus CT 200h is a compact car but it's big in Europe for Lexus – the brand's biggest seller and a winner for wooing new customers. After a major upgrade, it's time to take the hybrid CT 200h seriously, says Matt Kimberley of the Press Association.

The rain is hammering down. A group of motor journalists hurries towards a fleet of new Lexus CT 200h hybrids, eying them first and foremost as basic shelter from the elements.

As I dive inside the cabin of a mid-spec CT and unwrap a layer or two of clothing, the heavily updated centre console immediately stands out. The switchgear is still old-school Toyota, but there's a lovely, thin interface screen at the top and a new rotary control dial at the bottom, nicely within reach. Top-spec CTs get a neat joystick arrangement, but the system in this car is the entry-level unit that's arguably easier to get used to.

The big exterior styling change is the new 'spindle' grille which looks fantastic – much deeper and more recognisable than the old car's. Other big, if less obvious, news is the addition of spot welds around the boot aperture that have a marked effect on overall body stiffness – allowing the suspension to be softened slightly for greater overall control and comfort.

Emissions are also down, as low as 82g/km of CO2 if you can make do with tiny 15in steel wheels, but even the aggressively-styled 17in-wheeled F Sport model records no higher than 94g/km. Free road tax all round, and the petrol-electric hybrid system naturally emits negligible particulate matter – a growing problem for diesels in the face of Euro 6 emissions rules.

With a pleasant 'bing' breaking a silence peppered only by raindrops slapping against glass, the CT awakes. There's no need to start the engine yet, so it pulls gently away on electric power only. All CTs use the same 1.8-litre petrol engine and electric motor combination, controlled with EV (electric vehicle), Eco, Normal and Sport driving modes.

Sport draws more power from the electric motor and produces an impressively responsive and even modestly brisk car, while Normal, Eco and EV mode reduce the output and increase the dependency on the electric motor.

With a few miles under its wheels the hybrid system proves pretty flawless, switching the engine and motor as required and very smoothly. It's not as creamy an exchange as it is in the larger, pricier Lexus hybrids, but it's still utterly relaxing to drive in the city.

It's also amazingly quiet, thanks to new noise, vibration and harshness-reducing tricks. Slicing through snarled traffic to the open road where, even at speed, the CT is big-car hushed. No other car of its size can touch it for outright refinement.

The stiffer body and softer suspension cope admirably with broken road surfaces and the CT shows really impressive composure.

One other crucial feature of note is the front seat design. Such well-shaped and naturally supportive chairs are so rare in this class that you'd be forgiven for forgetting they ever existed. But they do, and they're right here. Top marks, Lexus.

Build quality is exemplary and even among Lexus's own high standards the CT has emerged as the most reliable car it has ever built. Price? Well, once you spec its rivals up to an equivalent level the Lexus is £3,000 or more cheaper.

Its old drawbacks have all but disappeared, and unless you simply have to have the sharpest-handling car in the class the CT 200h is a match for any German rival.