The wheels in the engine go round and round…that’s a bit too simplistic, but it’s the basic premise behind the Mazda RX-8’s rotary. Developed in the 1950s, the compact rotary (or “Wankel”, for its German inventor Felix Wankel) engine uses triangular rotors turning in a chamber to spin the driveshaft. Although a number of companies pursued it, including Rolls Royce and GM, all but Mazda abandoned it in favor of piston engines. The Japanese automaker first used it in its 1967 Cosmo Sport. Today, the only production rotary is the RX-8, successor to the RX-7 discontinued in 1995.

But this new RX is a complete departure. Unlike the RX-7, it has four doors and four seats. But the big news is under the hood: a new-generation two-rotary engine, dubbed RENESIS (for Rotary Engine Genesis) that improves fuel consumption and emissions. Mazda has a knack for turning out decent sportscars for relatively low dollars, and RX-8 is no exception. Although it feels about ten grand more, the base GS version is $36,795; the GT adds leather, dynamic stability control, self-levelling Xenon headlights, theft alarm, auto-dimming mirror and power seat for $39,595. Available options are a moonroof for $1,000, and a $3,000 navigation system.

Rotary engines rev high, but produce horsepower way out of proportion to their size: with the 6-speed, short-throw manual transmission, the 1.3-litre makes 238hp at 8,500rpm and 159 ft-lbs of torque at 5,500rpm, and redlines at 9,000. You can get a 4-speed automatic with Sport mode (at no extra charge); the autobox drops the ceiling to 7,500rpm, handing back 197hp at 7,200 and 164 ft-lbs at 5,000.

Since all of their movement is circular, unlike reciprocating piston engines, rotary engines are incredibly smooth – a trait immediately noticeable in RX-8. They also have far fewer moving parts. But they’re not perfect. Traditionally, they are thermodynamically inefficient; they’re tougher to conform to emissions standards; they use more oil and don’t always start well in cold weather; and because they’re low-volume, they’re expensive to build. They also use more fuel. RENESIS is an improvement, but my test car still returned a relatively thirsty 12.9L/100km.

Still, all that aside, this is a delicious car to drive. The engine winds out with a throaty pitch. Mazda rates it at 0-60mph in 6.0 seconds, but it’s equally comfortable at lower rpm when you’re stuck in traffic. Low-slung and balanced just about 50/50, RX-8 turns confidently through tight corners, although I found it a bit skittish when I crossed a large expansion joint on the highway at speed. It’s very sensitive and requires driver attention at all times. Mine was a summer test, but some owners have complained that it’s easy to get this light, rear-wheel-drive car stuck in snow.

Inside, RX-8 is well-finished. Its handsome console runs the length of the cabin and divides it into a four-seater, but its smooth line is interrupted by an ugly handbrake lever that sticks up even in the off position. I would have preferred an analogue speedometer to the digital numbers tucked into the tachometer, and the sporty aluminum pedals are way too slippery, especially with wet shoes. Understated and elegant touches include red theatre lighting on the lock and mirror buttons, and a cluster that glows blue until you turn the key.

The rear seats are comfortable with surprising headroom, but front-seat passengers will have to slide forward if there’s to be any rear legroom. The rear-hinged back doors – Mazda calls them “freestyle” – open to reveal a pillarless expanse for ease of entry, but work only in conjunction with the front doors to give this sports sedan more of a two-door appearance. Styling continues with RX-8’s long roof line, aggressive nose and the exaggerated wheel flares that generate such controversy: people either love ’em or hate ’em. I’m in the “yes” camp, especially when I’m behind the wheel looking out over them.

Warranty is 3-year/80,000km with Roadside Assistance, although with this powerplant’s extremely low volume, I’d hazard a guess that outside of major centres, parts and trained technicians might be equally scarce. Still, I’d put one in my driveway, in a heartbeat; Mazda has done this car right. At least, I might until the RX-7, which may be scheduled to make a triumphant two-seater return (at least in the US) for 2006. Watch the wheels turn.