The same engine that gave company car drivers a punchy but frugal alternative to the petrol Golf GTi and is used in the manic Seat Ibiza Sport TDi is now giving the Skoda Fabia a lusty shove.

The Fabia vRS is on sale now costing £11,990 on-the-road. Compared with the new five-door Ibiza TDi Sport, the Fabia vRS still flies the flag as the VW Group's budget brand, undercutting its Spanish cousin by more than £2,000.

And the launch of the vRS comes as fleets are taking the Skoda brand much more seriously. A spokeswoman said: 'In 2003 there was an increase in sales on 2002 as more fleets included Skoda, where there had been hesitation in the past.

'Acceptance has grown and the market has picked up. Five years ago only 10% of fleets would consider Skoda – that figure is now 70%. Our relationship with contract hire companies has also grown and they are buying more Skodas as customers demand them.

'We have increased the size of our business sales department. In 1998 we only sold 1,200 vehicles to fleets, which was just under 6% of total sales. We needed to increase awareness, which is why we set up the business sales department. This has now grown by 650% and accounts for just over a quarter of all sales.'

The styling of the vRS echoes the Fabia World Rally Car with a deep front spoiler, 16-inch alloys and green brake callipers.

But the real story is its surprising mid-range punch, with 229lb-ft of torque on offer from 1,900rpm and six gears to exploit it.

Floor the throttle in any gear and the surge towards the horizon is more akin to an aircraft taking off than a diesel supermini. Unsophisticated, but effective.

The Fabia vRS is roomy and comfortable and has a striking two-tone interior. It boasts heavily bolstered sports seats and complete with minimalist dash it gives that rally feel inside and out. The ride isn't at all harsh, and while you feel the car begin to lurch when cornering hard it's easy to build up confidence quickly.

Despite the rally pedigree of the Skoda badge, the vRS might not have the street cred of more established sporty brands but it is not without ability.

Model: Skoda Fabia vRS 1.9 Tdi
Engine (cc): 1,896
Power (bhp/rpm): 128/4,000
Torque (lb-ft/rpm): 229/1,900
Max speed (mph): 127
0-62mph (sec): 9.6
Fuel consumption (mpg): 55.4
CO2 emissions (g/km): 138
Fuel tank capacity (l/gal): 45/9.9
Transmission: 6-sp man
Price (OTR): £11,990