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Subaru brings an all-new version of the Impreza to market for 2012.

When one thinks of compact cars, the name Impreza probably doesn’t leap to the top of the mental list, unless the one doing the thinking is a Subaru loyalist. The small Japanese maker is looking to change that with the updated 2012 Impreza, which is restyled inside and out and features an all-new powerplant.

First things first: Only the relatively mainstream Impreza is changing—the sportier WRX and STi spin-offs aren’t going under the knife just yet. Nor are they going anywhere, they’ll carry on in current form for a while until replacements are ready. So breathe easy, Subaru/rally fan boys and girls.

Now, to the Impreza itself. The new model is definitely more attractive, both inside and out, with a more refined interior package.  But the biggest news besides the new design is the all-new 2.0-liter horizontally-opposed “boxer” engine that makes 148 horsepower.   Other significant changes include the deletion of the Outback Sport model, and news Subaru will now be able to tout an increase in fuel economy to a maximum of 36 mpg.

The Impreza is going head-to-head with other compacts like the Ford Focus, Honda Civic, and Volkswagen Golf. So not only does Subaru have to compete with those models, but it will have to live up to its reputation for sporty all-wheel-drive performance if it hopes Impreza can become a better-selling model in the company’s portfolio.

The 2012 Subaru Impreza loses 22 hp with its new 2.0-liter engine but it is also significantly lighter.

In an era where fuel economy has become the critical differentiator for many buyers – and a number of competitors are promoting 40 mpg highway numbers, Subaru engineers had a tough challenge in designing the 2012 Impreza and the new boxer engine.  That powertrain actually makes a notable 22 hp less power than the prior-generation Impreza’s 2.5-liter engine, with torque down 25 lb-ft, to 145.

On the positive side, the maker has also been able to cut the overall weight of the 2012 Subaru Impreza by 160 pounds, helping somewhat offset the dip in engine output.

We spent most of our day in a CVT-equipped hatchback, with a brief spin in a manual-transmission sedan. Off the line, the Impreza offers decent punch, but it seems limited in the upper rev ranges, and using the available paddle shifters to activate the continuously-variable gearbox’s 6-speed mode and downshift is necessary for passing or on-ramp attacking.

The 2012 Impreza abandons an aged 4-speed automatic in favor of a new CVT gearbox.

The CVT displays some weird engine-braking behavior when coasting, especially on downhill stretches of road. Opting instead for the manual transmission gets you a shifter with accurate, precise throws and a slightly grabby clutch. Step on the brakes, and the pedal is initially soft before progressively offering more bite.

The steering is the highlight here—it’s precise with the right amount of effort and feedback, and accuracy is spot-on. Body roll creeps in during cornering, but at an acceptable level. Subaru has done a nice job getting the handling mix right—the ride is sporty without punishing occupants, and the Impreza offers an overall sporting feel.

Wind noise seeps in, especially at highway speeds, but it’s not so intrusive as to force occupants to raise their voice in conversation. Tire noise only makes itself known on particularly rough pavement.

The 2012 Impreza line includes both a sedan and a wagon-like hatchback.

Cargo space in the hatch is more than adequate, and legroom and headroom up front is good enough for taller drivers and passengers. Cabin design is a bit dour and plain, with a somewhat bland gauge cluster and a navigation system/audio unit integration that looked downmarket. One nice touch—no pun intended—is the placement of soft-touch materials on the dash and door armrests.

The Impreza—available in either 4-door or 5-door form—comes standard with all-wheel drive, and there are five trim levels: 2.0i, 2.0i Premium, 2.0i Sport Premium, 2.0i Limited, and 2.0i Sport Limited. Transmission choices are as follows: All trims but the Limited and Sport Limited are available with either a 5-speed manual or a continuously-variable automatic (CVT), while Limited models are CVT only. Sport Premium and Sport Limited models are 5-door only.

Newly available items include electric power steering, a telescoping steering wheel, an Eco gauge, a trip computer, an adjustable center console lid, a driver’s knee airbag, and a brake-override system.  That Eco gauge takes itself seriously, by the way, offering such minutiae – when linked to the navi system and a route plugged in — as the grams of CO2 you’ll foul the air with while on your merry way.

Subaru is one maker that traditionally has had little trouble selling wagons and hatchbacks.

Other available features include Bluetooth, a USB port, an auxiliary jack, that aforementioned  navigation system, satellite radio, heated front seats, a moonroof, and more.

Subaru has kept the lid on pricing, starting the base at $17,495 before the $750 destination fee, same as in 2011.  However, a well-equipped Impreza 2.0i Limited will start pushing you into the mid-$22,000 range, a bit of a stretch – especially considering you can get something in the larger, more powerful Subaru Legacy family for that money.

Then again, many buyers are happy these days settling for a smaller, more fuel-efficient car.  And with the 2012 Subaru Impreza, the numbers come in at 25 mpg city and 34 mpg highway for manual-transmission cars (25/33 on hatchback models) and 27/36 on models with the CVT. For CVT models, that’s a 30% gain since 2011.

Interior refinement has been a Subaru weakness but is markedly improved with the 2012 Impreza.

Nonetheless, it doesn’t give Subaru bragging rights as the latest member of the 40 MPG Club, something Korean competitor Hyundai is putting much of its marketing muscle into promoting.

The Impreza won’t get the attention of a Ford Focus, never mind the new Hyundai Elantra, but it does offer an interesting alternative, especially with its standard all-wheel drive. Those looking for a sporty compact that offers a nice blend of utility and space while also getting decent gas mileage will do wise to look here. Yes, the interior needs to be jazzed up a bit, and the CVT is quirky at times. But that won’t stop the Impreza from being placed near the top of the compact shopper’s list.

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