This latest evolution of the Audi A3 is a great example of what can be achieved using simple technology to produce CO2-busting models – which bodes well for helping to reduce running costs. Although the TDI e would be even more impressive if it employed stop-start technology – as BMW is introducing to its range – its low emissions will no doubt steal the headlines. However, this A3 has more than that to offer – and for company car drivers, the miserly fuel consumption and low tax banding are also appealing.

The newcomer has a low CO2 output of 119g/km, and it’s aimed squarely at company car drivers, beating proposed changes to London’s congestion charge, which will see the levy become emissions-based.

But even if you don’t live in the capital, the newcomer’s fuel economy of 62.7mpg has genuine appeal. And because its emissions dip below 120g/km, it qualifies for an annual road tax bill of only £35.

It’s important to remember that the economy boosting features seen here will eventually be used right across the Audi line-up in a range of eco-friendly models. Many of them will also be fitted to mainstream cars, as the maker seeks to reduce the carbon dioxide output of its fleet ahead of new legislation due in 2012.

But despite the considerable efforts to improve this car’s economy, there’s not even a badge to mark it out as something special. In fact, you’ll be hard-pressed to spot anything unusual about the latest A3 from the outside.

The body has a few aerodynamic tweaks to make it more efficient, while the tyres on this car’s ordinary-looking alloy wheels have a reduced rolling resistance, which helps to cut fuel consumption.

Inside, it’s a similar story. The cabin is regular A3 fare, which means a smart design and solid build quality. However, the five-speed manual gearbox has specially selected extra-long ratios, and there’s a digital display between the dials that tells you which gear to choose to optimise economy. The 1.9-litre oil-burner, mean- while, has been assembled with low friction components and is tuned to return excellent fuel consumption rather than outright performance.

Yet the A3 still has a 120mph top speed and can sprint from 0-62mph in 11.4 seconds, while in-gear performance is livelier than these figures suggest. The tall ratios do take the edge off acceleration, but the flip side is impressive cruising refinement, especially at motorway speeds.
You will find yourself changing gear more frequently than normal – especially around town – but the light shift helps to minimise the inconvenience, and extracting the maximum fuel economy from the engine quickly becomes second nature.

The A3’s precise steering and smooth ride complete the dynamic package, but there’s nothing groundbreaking to get excited about – and the 1.9 TDI is noisy when cold.

Without special branding, the A3 plays down its eco aspirations, and at £16,660 it isn’t cheap, either. But low emissions, relaxed performance and impressive economy all suggest that if you want to make a statement, green is the colour to be seen in.

RIVAL: VW Golf BlueMotion
The Golf will also dip below the all-important 120g/km road fund licence barrier when it hits UK showrooms next year. It should undercut the A3 on price, too, plus rival its impressive fuel returns.