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Smaller is bigger. That's the start of the 2012 Honda CR-V story.

What's more, this remade compact crossover is more powerful, has better fuel economy, a better all-wheel-drive system and a so-called "value" story.

Smaller is bigger? Honda's engineers and designers are almost giddy talking about a lower and shorter overall CR-V with more cabin and cargo room. The secret? They moved the windshield forward and lowered the cargo floor. There is also an improved instrument panel and, unlike with the latest Civic, the cabin materials are pretty decent.

The CR-V, of course, is Honda Canada's second best-selling vehicle and one of Honda's top sellers worldwide. This rig matters. A lot. Especially in the wake of the redesigned 2012 Civic.

The Civic, as you know, has been whacked by critics for shortcomings that start with an interior seemingly inspired by Filene's Basement. A repeat of the Civic launch would be a major disaster for Honda.

But that doesn't seem to be the case here, even though the CR-V and the Civic share the same basic mechanical base. Moreover, the 2012 CR-V is following in the tire tracks of the Civic in the most important way of all way: pricing.

The base model has dropped to $25,990 versus $26,290 for the 2011 starter wagon. At the other end, Honda Canada has a new top-of-line Touring model at $34,990. The 2011 CR-V topped out at $33,490. The 2012 Touring is the ritzy CR-V, loaded up with standard AWD, an auto-dimming rearview mirror, chrome door handles, roof rails and a long list of other standard features on all CR-Vs: Bluetooth HandsFreeLink yakking, a full-colour multi-information display, a multi-angle rearview camera with guidelines and heated front seats. air conditioning, cruise control, tilt/telescoping steering wheel, rear-seat heater ducts and a 160-watt AM/FM/CD player.

Honda is anxious to share all this, and to reclaim its mojo with a successful CR-V launch. That said, let's give Honda credit for owning up to past Civic mistakes. At December's Tokyo Motor Show, Honda Motor president Takanobu Ito took personal responsibility for the bad Civic reviews, noted Automotive News. The company's global research and development chief said Honda simply took its eye off the two most important balls in the car business: the competition and the customer.

Yoshiharu Yamamoto, president of Honda R&D, told Automotive News that with the 2012 Civic, "our competitors, including Hyundai and Ford, set clear targets to make their cars better than the Civic. We probably did not pay close enough attention to where our competitors were at." Confession is good for the soul, correct?

So is the realization that the CR-V is one of four core models for Honda and all will have been remade by the middle of next year. Honda is a car company with only a handful of high-volume offerings, so the pressure is on to make each one a winner. The relatively new Odyssey minivan is excellent, the new Civic, not so much. Next year we'll get a new Accord mid-size car.

With the CR-V, the designers have delivered a wagon with a more aerodynamic design. Prettier? Not so sure, though the slicker sheet metal is a critical for fuel economy. Bake in a weight reduction and less engine friction and out pops a CR-V with slightly more horsepower (185 versus 180 before), quicker acceleration and better fuel economy – despite the mostly carryover powertrain.

The numbers: the 2.4-litre four-cylinder engine is rated at 9.0 litres/100 km city/6.5 highway (two-wheel drive) and 9.2 city/6.6 highway (AWD). Honda's engineers are also touting the new "ECON" operating mode for those who want to squeeze out even more fuel efficiency. The four-banger is the only engine Honda offers with the CR-V; there is no V-6 or turbocharged option, as is the case with some rivals.

To improve the drive, Honda stiffened up the CR-V with a strengthened tailgate area and thicker gauge steel in certain areas. The AWD system now has electronic actuation of the torque split mechanism between the front and rear wheels, though the basic design is a carryover hydraulic system. The improvement is simple and important: the rear wheels always get some power at startup and 100 per cent of engine torque can be sent to the front or rear wheels. Also to save fuel, Honda has gone to full electric power steering.

The cabin is comfortable and tasteful and even clever in some ways. For instance, the split-folding rear seats will drop flat with the touch of a lever easily reached from the tailgate. A nifty space in the centre console provides excellent storage, where it's often needed.

But Honda does need to remember the competition with rival models that offer more horsepower and lower pricing. The new CR-V's ride also could be quieter at highway speeds, the five-speed automatic transmission is nothing special and the design at the very least gives this crossover a big rear end with some visibility issues.

Nonetheless, this Honda sells in big numbers for many good reasons – from an excellent quality story, to strong safety ratings, high resale values and overall functionality. That all remains for 2012.

jcato@globeandmail.com

2012 Honda CR-V

Type: Compact crossover

Base price: $25,990 ($1,590 freight)

Engine: 2.4-litre, four-cylinder

Horsepower/ torque: 185 hp/163 lb-ft

Transmission: Five-speed automatic

Drive: front-wheel and all-wheel

Fuel economy (litres/100 km): 9.0 city/6.5 highway (two-wheel drive) and 9.2 city/6.6 highway (AWD); regular gas

Alternatives: Toyota RAV4, Mazda CX-5, Hyundai Tucson, Kia Sportage, Jeep Patriot and Compass, Chevrolet Equinox, GMC Terrain, Ford Escape, Subaru Forester, Volkswagen Tiguan, Mini Cooper Countryman