CVT doesn't mean 7 speed auto, although a lot of people associate CVT with 7 speed auto due to the steermatic design.

CVT means continuously variable transmission. You know when you buy a new car and look at the specs, they usually have a section for the gearbox saying gear 1 ratio is like 3.506, gear 2 is 1.872 and so on until gear 5 is like 0.782 or something like that? CVT doesn't have that. It just has a minimum and a maximum, which in this example, would be 3.506 and 0.782. The gear can be anything in between those numbers, i.e. infinite number of gears.

The benefit of this is that you main your engine RPM at optimum level (~2k i think, could be wrong here) the entire time so you don't get a very smooth acceleration curve and maintain good fuel consumption (since engine is almost always at the optimum level). People say its 7 speed because the steermatic allows you to "set" a virtual maximum for the gear. It doesn't really physically exist, but the gear box tries to limit the CVT to not go above those virtual ratios, so it gives the illusion of 7 "gears". In reality, they can put however many they want, 10, 20, 30 (although going so high would be a bit silly) so they just use 7.

According to the article I read about the new engine, the 1.3l i-vtec is around 20-24 km/l while the 1.5l i-vtec is 19.6 km/l (normal driving is closer to 18.8 km/l). This is based on how it performs on the current Jazz platform though, so if they use the same engine in the upcoming City (they probably will), the numbers should be around this range.

The 1.3l maintains the current i-dsi spec from Honda while the 1.5l loses between 0.4 - 1.2 km/l. Up to you to decide if the extra 10 hp is worth it along with the new enhancements.

I agree. If the next City doesn't have the CVT, I will probably buy the current City just before the next City launches. Hopefully, they'll have two versions but that might be asking for too much. Eitherway, *fingers crossed*