Small turbocharged petrol engines are the future – and the 123bhp 1.4-litre unit in the A3 is a cracker. It makes the Audi genuinely quick and easy to drive, yet economical, too. It’s a shame the company hasn’t tried harder to reduce its emissions by introducing a stop-start system, for example. But the TFSI is still a welcome addition to the A3 line-up – and this powerplant is set to star in the forthcoming A1 compact hatcback, too.

When it comes to eco-friendliness, hybrids may well be the future – but in the short term at least, small turbocharged engines are the way forward for clean and green transport.

Take Audi’s latest A3, for example. Its 123bhp 1.4-litre turbocharged petrol unit replaces the normally aspirated 113bhp 1.6 FSI – and it’s an improvement in every way. Despite being more powerful, the new TFSI delivers greater fuel returns and lower emissions.

Video: watch CarBuyer's video review of the Audi A3

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Indeed, its figures are very impressive on paper. The benchmark sprint from 0-62mph is completed one second faster, at 9.6 seconds. Top speed jumps by 4mph to 126mph, too. Yet thanks to the engine’s smaller capacity, combined consumption is reduced by nearly 1mpg to 43.5mpg, while the CO2 output falls 4g/km to 154g/km.

Admittedly, the TFSI is unlikely to bring big savings at the pumps over the 1.6, while it costs just as much to tax for private owners. When it comes to company car tax, this model also sits only one band lower, so it won’t make a big difference.

It’s a pity Audi hasn’t added any clever features on top of the direct-injection and turbocharging. A stop-start function would have been welcome – this is an area in which rival BMW has leapt forward, thanks to its Efficient Dynamics system.

Nevertheless, in terms of performance, the 1.4 TFSI is clearly way ahead of its main competitor from the blue propellor: the 116i. The A3 delivers a storming 200Nm of torque – that’s 45Nm more than the old 1.6-litre FSI powerplant – and it’s available from only 1,500rpm. So there is plenty of urge at any engine speed.

Power delivery is smooth, and while there’s some characteristic turbo rush, the boost from the charger isn’t particularly obvious. It just feels as if this model has a larger engine. But refinement is impressive, and the six-speed manual gearbox ensures quiet cruising at the motorway limit.

Other than the punchy performance, nothing about the driving experience is going to set pulses racing. Although the rear-wheel-drive 116i is precise and entertaining, the A3 is a little vague. The steering is light and rather lifeless, while all the pedals have a rather mushy feel.

At least the ride is comfortable, and refinement is impressive, which means the A3 is relaxing at speed. It comes generously equipped as well; 16-inch alloy wheels, climate control and cruise control are included.

If the handsome but subtle lines of the standard 1.4 TFSI aren’t head-turning enough for you, an S line variant is available. It brings a bodykit and 18-inch alloys. Yet even in basic guise, this A3 isn’t cheap. Prices start from £16,365 – although the money gets you a car which is much better than the old 1.6 FSI. It offers plenty of performance with few penalties.

Rival: BMW 116i
Thanks to BMW’s Efficient Dynamics technology, the 116i returns 48mpg and emits 139g/km of CO2. But the 1.6-litre petrol model is a sluggish performer. Its chassis is better, yet the 1-Series is no match for the gutsy new A3.