In spite of these trying times, one can’t deny that the auto industry is growing, and so too are the cars. It wasn’t too long ago when the compact car was the smallest one you could buy, hence the name.

These days we have micro compacts (Kia Picanto, Hyundai i10, Suzuki Celerio), and a growing roster of micro minis (Smart Fortwo, Toyota iQ). As for the compacts they’ve grown to the size of mid-size cars two or three generations ago. It’s only a matter of time before they move upmarket completely.

It’s the same cycle year after year. Competition spoils the consumer with a constant string of cars that are bigger, more powerful and more luxurious than the last. It should come as no surprise then as to why the subcompact class has become one of the new battlegrounds for first-time car buyers.

One of the more popular choices among them is Honda City 1.5 E and it’s not hard to see why.

The car exudes speed and energy with its design. The front grille and headlights combine to produce a futuristic angled shape. Three bars seemingly twist like wrought iron to form the grille, while the headlights continue a line that tapers towards the sides.

From there a line curves outward and straightens up to create a dynamic form — a little trick that wedge shaped sports cars in the 80’s used to use. There’s a tasteful mix of edges and curves in its shape. There’s also uniformity in the design idea with tail lights that continue the arrow theme; protruding outward diagonally from an invisible line suggested by the alignment of the door handles.

Inside is an alluring interior that subtly hints of sports car inspiration. The shoulder line outside is reflected in the interior, extending from the doors and arching around the dashboard. The interior takes on a black (thankfully opting away from the passé carbon fiber trim) and silver color scheme. The front seats wrap around one’s body and better bolster both driver and passengers, and a whole range of height, tilt and telescopic adjustments are available.

Dials in the instrument cluster, borrow bright orange illumination from sporty European brands. Vital info is separated into three dials while in the very center dial sits a fuel efficiency computer that provides real time and average fuel consumption along with estimated range.

The flush piano black and matte silver center dash holds the stereo and climate controls on a bib that seems to hang from the arched dash. The stereo plays radio and CDs through four speakers and will easily accommodate MP3s and iPods through its auxiliary input and iPod cable. As for climate, the interior is quickly cooled thanks to additional vents on the rear seat floor.

The rear is usually a source of complaint for this kind of class, yet the City remedies this with a floor that is nearly flat and offers some additional storage space under the seats.

Unfortunately, they can’t fold to accommodate bulky cargo like before. There is, however, an abundance of cup holders, pockets and storage bins that will hold drinks and snacks on the go while the cavernous 506 liter capacity trunk can take up to four nine-inch wide golf bags.

Under the hood is a competent i-VTEC engine that despite being just a 1.5 liter, produces an astonishing 120 hp and 107 pound feet of torque. You have a selection of five gears to shift through (using the paddle shifts either in D or S) or left for the computer to decide, with grade logic control and shift hold. The latter features keep the car in the same gear during inclines or turns for better response when it is needed.

With all that bundled together, you can expect to achieve the same high fuel efficiency figures if not better than the last City. It is suspended by Macpherson struts in front and H-shaped torsion beam in the rear for a slightly better ride and greater stability than the last.

Then, there’s the safety factor. Dual airbags and discs on all four wheels coupled with ABS, EBD and brake assist bring passengers and car to a brisk but safe stop. Despite taking on a wedge form the new collision compatibility design assures passengers that their lives are in good hands even in impacts with larger vehicles.

Finally, even those outside the car have been thought of with pedestrian safety impact absorbing components in front.

The only downside is that there’s a price to pay for all this improvement. Just as the car hopes to move upmarket, so too does the price. P806,000 is a lot to ask for a subcompact. Then again, no other car in this category can offer 120 horsepower with a 5-speed auto and still return the kind of mileage a 1.3 liter would usually get.

Indeed, against the Civic, the City will always fall short in terms of space (145 millimeters in length less), power (20 horsepower less), accessories (smaller wheels and no HID) and image (compact vs. subcompact) — trivial matter for some, deal breakers for others.

Don’t count on an end to that cycle of saving. In the future, we’ll likely have a similar debate over buying a micro-mini as opposed to a mini compact. So when do you give in? This is easily one of those times.