##volkpol.jpg --Right##FIRST glances won't reveal too many differences between the old Polo and the new, but Volkswagen claims 80% of the hatchback is new - the estate and saloon models receive only detail changes. On sale in January next year, the new car hasn't come a moment too soon as the Polo was beginning to look dated among its rivals and the plethora of new models making their way into Volkswagen's price list this year.

Despite this, the Polo's recent sales figures have been impressive, creating the ideal springboard for the new car's launch. Against the Polo's early reputation for poor value and high prices - largely unfounded thanks to rethought specification and some welcome new engines in recent years - sales in the first seven months of 1999 were 20% up on the same period in 1998 at 28,742, equating to total annual sales of around 42,000 units.

Though the hatchback's outline shape is similar to the old car's, the extensive facelift, with a new front end incorporating lamps with 'clear' lenses, a revised bumper and new bonnet, brings the Polo's 'face' into line with newer models in the VW range, while the new rear bumper and tailgate, together with revised side trims, update the rest of the car. Inside, a sharp new dash, reminiscent of the Lupo's, makes the most of some fine quality materials: the dash is topped with an appealing tactile soft-touch plastic, and the instruments are illuminated in Volkswagen's hallmark blue. The whole effect brings to mind the quality we've become accustomed to in the Golf, Bora and Passat and instantly shames other superminis, including the new Punto and Fiesta.

There's no extra space over the previous car, which means the Polo ranks in the middle ground in terms of cabin packaging, though there's still ample headroom and - a boon for taller occupants - plenty of rearward travel on the front seats. But it's under the bonnet that the most significant advances have been made. The new Polo ushers in four new engines: two of these have transferred from other Volkswagen models - the 1.4 16v 75bhp unit already available in the Lupo and Golf, and the 64bhp 1.9 SDI diesel previously offered only in the saloon and estate. The others are a new 125bhp 16v 1.6 for the GTI and a technologically advanced 75bhp 1.4-litre three-cylinder TDI using the latest pumpe dnse injection technology, giving a total of five petrol and two diesel engines in the hatchback.

Saloon and estate engine options are unchanged except for the addition of the 1.9-litre 110bhp TDI unit: such power and torque in a relatively small car will make an interesting 'hot hatch' alternative. Along with the new engines is a revised trim line-up that falls into line with other Volkswagen models.

Base-level E spec comes with a choice of 1.0 50bhp, 1.4-litre 60bhp and 1.9 SDI 64bhp engines. S takes in 1.4 8v 60bhp, 1.4 16v 75bhp and 1.9 SDI, while SE can be had with three 1.4-litre petrol units with 60bhp, 75bhp, 100bhp and the 1.4-litre TDI. The top model 1.6 GTI has 125bhp. Of all these, it is the startlingly good 1.4 TDI that shines brightest. Outstandingly tractable from low revs, thanks to a solid 144lb-ft of torque at just 2,200rpm, and endowed with a surprisingly sporty three-cylinder engine note, this will be the smallest diesel on sale in the UK.

Most remarkable of all, however, is its fuel economy: at 64.2mpg on the combined cycle, and with CO2 emissions of just 119g/km, the 1.4 TDI will rank among the cleanest and most efficient cars on the road.

The 1.4-litre 16v 75bhp petrol engine offers brisk performance with a top speed of 114mph and combined economy of 43.4mpg at the expense of raucous engine noise. And as with all models, there's a disappointing level of wind noise from around the A-pillars. The GTI's 125bhp gives a top speed of 127mph and 0-62mph in 8.7secs, class-leading performance that virtually matches the new Punto 1.8-litre HGT's 127mph and 8.6secs 0-62mph time. Its economy, however, is significantly better at 39.8mpg, compared with the Punto's 34.0mpg.

On the road, the Polo feels predictably solid, with great balance and superbly responsive power steering. The sports models have a firmer ride than the three-cylinder diesel which, in many ways, is the pick of the bunch with its ample performance, extraordinary fuel economy and surprisingly attractive engine note. Helping to banish forever VW's poor value reputation is a much improved standard equipment list: power steering, twin front airbags, split-fold rear seats and power door mirrors. The S adds central locking and electric front windows, while SE adds ABS, a sunroof, six-speaker stereo and front fog lamps, with air conditioning optional on all but the GTI, on which it is standard. The GTI also gets 15in BBS alloy wheels, an alarm and interior and exterior trim upgrades for a price that's anticipated to nudge £15,000.

To many fleet customers, the Polo name stands for bullet-proof residual values, brilliant build, great design integrity and a certain sense of chic in the styling, all of which makes for low running costs.

Though UK pricing has yet to be finalised, early indications show it will be similar to the present range, starting at under £8,500 for the 1.0-litre three-door and rising to £14,800 for the three-door only GTI on-the-road.

That makes entry level 1.0-litre models more expensive than the cheapest Punto, the 1.2 8v 3dr, which costs £7,995. And though the new Polo isn't as technologically innovative, lacking the Fiat's unique dual-mode power steering and novel sequential automatic transmission options and such niceties as a six-speed gearbox on the sports models, Volkswagen counters with a three-year unlimited mileage warranty and fully galvanised body with 12-year guarantee, and combines it with one of the widest supermini ranges on the market.

On sale: January 2000. Price (OTR): c£8,500 - £14,800