One of the fuel efficiency improvement policy of Small vehicle included Regenerative Braking System (JSAE 20139006 / SAE 2013-32-9006), but developed New Compact Hybrid System to realize further fuel efficiency improvement. The previous system has losses for the engine friction when deceleration energy is collected, but the new system realizes effective regeneration with separating the engine. The new system collect deceleration energy in decelerating time and coasting as well as the previous system, but the fuel consumption with the engine is minimized by running EV with the collected energy and realize further fuel efficiency improvement. In addition, the assist is also performed with collected energy, so both good efficiency and good accelerating performance are realized.This system adopts Auto Gear Shift® system (following, AGS) which is based on a manual transmission. This AGS is one of the systems which is light-weight, compact, and transfer efficiency is good, and is most suitable for the fuel efficiency improvement of small vehicle. But there is a problem of driving torque outran at the time of gear shifting, and acceleration fluctuation occurs. About this problem, using collected deceleration energy, supplemented torque realize smooth transmission feel.When a hybrid system is put on small vehicle, the vehicle behavior is subject to increase of weight, but, as for this hybrid system, it is suitable for small vehicle because of its minimizing weight.This paper focuses on our concept and basic performance of the new compact hybrid system.