Volkswagen up!

The up! takes everything VW is famous for and doesn’t compromise, but compresses it into its most useable package ever. Engineers have worked wonders extracting so much interior space from such a small footprint on the road, while the cabin sets new standard in the sector for quality and technology. What’s more, the new three-cylinder engine is bursting with character, while ride comfort and refinement are excellent. Providing the pricing is right, it’s hard to see how it won’t be a roaring success.

Small cars are growing in popularity by the day – and VW is ready to cash in. The Volkswagen up! is its new entry-level model, a direct rival for the Fiat 500 and a car that will spawn Skoda and SEAT-branded versions. It also promises to bring new levels of quality and space to the city car segment, and we were the first in the world to get behind the wheel.

Video: Watch CarBuyer's video review of the VW up!

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The 2007 concept car’s rear-engine, rear-wheel drive layout has been ditched in favour of a more cost-effective front-engine, front-wheel drive setup. Fortunately though, it hasn’t hampered the practicality. At around 3.5 metres in length it’s almost identical to the Fiat 500, but a particularly stretched wheelbase and short overhangs mean it’s a triumph of packaging inside.

An adult can sit comfortably behind the driver or passenger, which is more than can be said for the Fiat, while headroom and elbow room is excellent in the front and back. There’s even a decent sized 251-litre boot, expanding to 951-litres with the 60/40 rear seats folded flat.

The up! comes with a brand-new 1.0-litre, three-cylinder petrol engine under the bonnet, tuned to either 59bhp (with sub-100g/km Co2 emissions) or 74bhp as driven here. VW have decided to omit a diesel engine because of the extra cost, but a 67bhp CNG version which emits 79g/km will be launched, although it’s unlikely to make it to the UK. An all-electric up! will arrive in 2013.

Right from the off it’s clear the new engine is a peach. It’s virtually imperceptible at idle but lets out a classic three-cylinder warble as the revs rise. And with no turbocharger to boost torque, revving this engine is a must to get the most out of it. Do that and it feels faster than 0-62mph in 13.2 seconds suggests, but in the real world the claimed economy will be hard to achieve.

Predictably, the steering is fingertip light, but extremely direct, while the manual gearchange is snappy and a pleasure to use - an automated manual ‘box will be available at a later date. Another pleasant surprise is the forgiving suspension, which meant the car rolled about in bends but rode brilliantly on all surfaces we encountered. Road and wind noise, even when we hit 100mph on the Autobahn, was well suppressed, boding well for the up!’s everyday usability.

For a car predicted to cost from as little as £8,000, rising closer to £12,000 for the top-spec model we tested, there was always the chance VW would be forced to cut corners. In the cabin though, it feels just as solid as any other VW. In fact, the gloss multi-coloured trim covering the dash and door panels makes it a far more interesting place to spend time than the more expensive VW Polo.

There’s no shortage of technology either. A detachable Navigon unit, costing less than £350, clicks onto an integrated dash mount and not only provides directions, but syncs with the car to display telephone controls, eco-driving tips and even a digital tachometer. An automatic braking function, active at speeds of up to around 20mph, is yours for around £180.

As for the styling, it’s a simple shape that works well, but to be fully appreciated it need to be seen in the flesh. Up close, details like the gently smiling lower grille, chamfered bottom edge to the glass area and the blacked-out tailgate give the car a character all of its own. The wheels too, with the oversized VW badge in the centre, add a touch of retro to a modern design. VW is the master of understated but anonymous styling, but fortunately in this respect, and a host of others, the up! is a break from the norm.