The long-running automotive horsepower war might finally be grinding to a halt with a stalemate, at least in the compact car segment. Replacing power output one-upmanship is a new, much greener conflict over fuel economy. Among compacts, 40 mpg is the new target, one that the Mazda 3 has fallen woefully short of in the past. Not anymore.

For 2012, the Mazda 3 sedan and hatchback are available with Mazda's new "Skyactiv" powertrain components: a 2.0-liter four-cylinder engine paired to either a new six-speed manual or six-speed automatic transmission. Mazda's engineers essentially went through the internal combustion engine with a fine-toothed comb, looking at the myriad inherent inefficiencies and devising clever solutions to address them.

The result is a power plant that can hit that magic 40 mpg without "tricks" like adaptive front grille shutters or transmission programming that shifts the car into top gear at the earliest opportunity. Nor has the rise in fuel economy come at the expense of power. The new Skyactiv engine, which slots between the carryover 2.0-liter and 2.5-liter four-cylinder engines, boasts more power than the Hyundai Elantra and Chevy Cruze Eco -- two cars that also hit the 40 mpg threshold. Only the Ford Focus sports a better combination of power and fuel economy, but it only achieves 40 mpg highway with its Super Fuel Economy package.

This new engine complements the 2012 Mazda 3's other existing strengths, including sharp handling, a stylish interior and an available hatchback body style. That said, the 3 isn't quite the no-brainer pick it once was. The Elantra, Cruze and Focus are all excellent choices for a small sedan or hatchback. But for competitive fuel economy and a fun-to-drive nature, the Mazda 3 is hard to beat.

The 2012 Mazda 3 is available in four-door sedan and hatchback body styles. Both are available in 3i and 3s trims that are further broken into subtrims. The high-performance Mazdaspeed 3 is reviewed separately.

The 3i SV and Sport trims are available only on the sedan. The SV comes sparsely equipped with 16-inch steel wheels, power mirrors, power windows, a height-adjustable driver seat, a tilt-and-telescoping steering wheel, a 60/40 split-folding rear seat and a four-speaker sound system with a CD player, auxiliary audio jack and steering wheel controls. The Sport adds air-conditioning, power locks, keyless entry and an outside temperature display.

The rest of the Mazda 3 trims are available on both the sedan and hatchback. The 3i Touring adds to the Sport equipment the Skyactiv-G engine, 16-inch alloy wheels, cruise control, a leather-wrapped steering wheel and shifter, a rear-seat center armrest, a trip computer, Bluetooth (phone and audio streaming) and a six-speaker sound system. The Touring can be had with a package that includes a sunroof and a 10-speaker Bose surround-sound audio system. Those items are standard on the 3i Grand Touring, which also gets heated mirrors, an eight-way power driver seat, heated front seats, leather upholstery, a sliding front center armrest, a color trip computer and a compact navigation system.

The 3s Touring adds on a more powerful four-cylinder engine, 17-inch alloy wheels, upgraded brakes, foglamps, LED taillights, a deck lid spoiler (sedan), keyless ignition/entry, sport seats and dual-zone automatic climate control. However, it reverts back to a manual driver seat and cloth upholstery, while the sunroof and navigation system are options. The 3s Grand Touring includes those items.

The Tech package available on both 3i and 3s Grand Touring trims adds a blind-spot warning system, adaptive bi-xenon headlights, automatic wipers and satellite radio (optional separately on all trims).

An iPod/USB audio interface and a six-CD changer are available as dealer-installed accessories on all Mazda 3 trim levels.

The 2012 Mazda 3i SV and Sport trims are powered by a 2.0-liter four-cylinder engine that produces 148 horsepower and 135 pound-feet of torque. A five-speed manual is standard on both subtrims, but the Sport can be equipped with an optional five-speed automatic. In Edmunds performance testing, an automatic-equipped 3i with this engine went from zero to 60 mph in 9.9 seconds -- a slightly slow performance among similarly powerful sedans. EPA-estimated fuel economy is 25 mpg city/33 mpg highway and 28 mpg combined with the manual and 24/33/27 with the automatic.

The 3i Touring and Grand Touring trims get a new, more advanced 2.0-liter four-cylinder (Skyactiv-G) that produces 155 hp (154 in California-emissions states) and 148 lb-ft of torque. A six-speed manual transmission is standard and a six-speed automatic is optional.

In Edmunds performance testing of an automatic-equipped sedan, a Skyactiv Mazda 3 reached 60 mph in 8.5 seconds, which is quick for the class. EPA fuel economy estimates for this new engine put it among the class leaders: 28/40/33 for an automatic-equipped sedan and 27/39/31 for a manual-equipped sedan. The hatchback is estimated to return 28/39/32 and 27/38/31, respectively. In extensive fuel economy testing, we confirmed that this engine does achieve these impressive figures.

The 3s trims get a 2.5-liter four-cylinder that produces 167 hp and 168 lb-ft of torque. These numbers are downgraded slightly in California-emissions states. A six-speed manual transmission is standard and a five-speed automatic is optional. In Edmunds testing, the 3s went from zero to 60 mph in 8.1 seconds regardless of transmission -- a strong performance, but not much of an improvement over the Skyactiv engine. EPA-estimated fuel economy is 20/28/23 with the manual and 22/29/25 with the automatic. These estimates are quite low for the small car segment.

Every 2012 Mazda 3 comes standard with antilock disc brakes, stability and traction control, brake assist, front side airbags and side curtain airbags. A blind spot warning system is optional on the Grand Touring trims. In Edmunds brake testing, a 3i Sport stopped from 60 mph in a rather long 135 feet. The 3i Touring was no better, but the sportier 3s stopped in a solid 123 feet.

In government crash testing, the 2012 Mazda 3 received four out of five stars for overall crash protection, five stars for overall frontal protection and three stars for overall side protection. The Insurance Institute for Highway Safety gave the 3 the highest rating of "Good" in the frontal-offset, side-impact and roof strength tests.

The 2012 Mazda 3 has refined road manners that will likely surprise most economy car shoppers. Responsive steering and performance-oriented chassis tuning make it one of the most enjoyable small cars to drive on winding roads. On a daily basis, the 3's highway ride is smooth enough for most commuters, although drivers who prefer softly sprung compacts like the Toyota Corolla might think the 3 rides too firmly.

In terms of engines, the upgraded 2.0-liter engine found in the 3i Touring and 3i Grand Touring models is the best bet. Its 155-hp output slots in between the other two engines, but blows them both away in fuel economy. Its acceleration is more than adequate for most buyers, and in fact the more robust 2.5-liter offers only a negligible acceleration benefit. The engine's accompanying automatic transmission is also a bright spot, offering shifts that are remarkably quick, responsive and smooth.

Among several impressive new competitors, the Mazda 3's interior design and materials quality isn't the class leader it once was. Still, even if it isn't top dog, that doesn't make it a mangy mutt. Even the lowest trim levels feature soft-touch surfaces, while Grand Touring models offer enough luxury and convenience equipment to keep pace with other so-called premium compact cars. Some may find the stereo controls a bit complicated or the optional navigation system a bit tedious, however. The latter's small screen and wheel-mounted buttons make for a clumsy interface, but at least it's relatively inexpensive.

The Mazda 3 is also a bit less spacious than its competitors, with long-legged folks likely to be cramped in back and possibly in the driver seat as well. The available power driver seat helps the latter situation, but the optional sunroof hurts it further. The 3 hatchback would be our choice, since it offers all the sedan's high points and adds greater practicality. Luggage capacity (with the rear seats up) is 17 cubic feet with the hatch, but only 11.8 with the sedan.