Iain Dooley says Honda has improved its popular Jazz supermini after listening to its customers.

If you want a good example of a company that listens to its customers look at Honda. Although the Japanese firm is well known for innovation, it's also keen to ensure it promotes a culture of happy drivers.

And there's no better example of this than its Jazz which has proven to be a UK best-seller. By choosing to develop something that was more than just another supermini, Honda struck a chord with buyers seeking something with a small footprint but with the flexibility and practicality of something much bigger.

This revised second-generation car builds on the original's success. Presenting a chunkier face to the world, Honda's engineers have added a few aerodynamic tweaks to boost cabin refinement and overall efficiency. The latter is important, as this element plus engine improvements have resulted in economy and emission gains. It's also revised the ride and handling to boost driver appeal and comfort.

Talking of green issues, this Jazz has the honour of being the first small production hybrid. Keen to broaden the appeal of such technology beyond its Insight model, the Jazz hybrid follows on from the sporting CRZ petrol-electric model.

There's more good news in the shape of the reintroduction of a continuously variable transmission (CVT) as an option alongside the manual gearbox. It might not sound like much, but the previously used automated manual transmission wasn't met with universal appeal.

As a result, Honda listened, took on board the feedback and now offers a CVT that should please buyers seeking a smoother experience akin to than of a conventional auto, but without the fuel economy penalties.

Existing Jazz owners will be familiar with the 1.2 and 1.4-litre petrol engines, which now boast CO2 levels of 123 and 126g/km respectively with a manual gearbox and return a combined MPG in the low 50s mpg.

The hybrid borrows much from Honda's Insight, right down to the CVT gearbox. It manages 62.8mpg and boasts a lower 104g/km CO2 rating, the latter Honda claims is the lowest for an auto gearbox car in the Jazz's market sector.

On the road the petrol cars are willing, capable and refined. The 1.4 Jazz with the new CVT gearbox is easy to drive and the gearbox offers a welcome extra layer of refinement over its predecessor. Furthermore, the traditional enemies of CVT-equipped cars – inclines and fast moving motorway traffic – are no barriers to progress. There's plenty of power available to get you moving and maintaining a steady speed.

This is also the case for the hybrid Jazz. Even in 'Eco' mode there's enough thrust available for out-of-town journeys, while urban motoring is dispatched with predictable ease. The easy-to-read instrument displays keep you informed about fuel consumption and the current combination of engine and electric power, which do a clever job of nudging you in the direction of more considered and smoother driving behaviour.

Good though it is on the road, there's more to the Jazz than the driving experience. Its versatile nature is another major attraction for buyers, and the car's folding rear seats offer a greater level of versatility than the little Honda's more conventional rivals.

From furniture to bicycles the Jazz will swallow many of these items whole. And for anyone seeking a car with a modest footprint, this feature is often a deal-breaker. It also happens to be a hit with the business market – drivers who carry a lot of equipment but don't want, or their company car policy doesn't allow, a large, high CO2 car can opt for a Jazz with complete confidence.

With its well built and versatile cabin, a good level of standard kit plus the various improvements to the driving and ownership experience, Honda's Jazz remains a tough act to beat. The hybrid model will please those wanting to pay less for their motoring, too.

HONDA JAZZ

Model: Honda Jazz 1.4 EX CVT, �15,995 on the road. Range from �11,295

Engine: 1.4-litre, 99bhp petrol

Transmission: CVT automatic transmission driving front wheels

Performance: 0-62mph 13.1 seconds; top speed 109mph

Economy: 51.4mpg

CO2 Rating: 128g/km