SLOTTING a 1.0-litre engine out of a city car into a large family hatchback may not sound the smartest of moves but it's one Skoda has carried off with astonishing results.

With the benefits of turbocharging the Czech car maker has taken a 999cc three cylinder petrol engine from parent company Volkswagen and made the entry-level Octavia hatch and estate not only easier to drive but also much more economical.

In fact, 60 to the gallon is not out of reach in everyday motoring and that's in a car that is generously proportioned for five and weighs the best part of 1.8 tonnes.

The way the 1.0-litre TSI performs is a genuine eye opener and gives the Octavia a new string to its bow.

It is the first time Skoda has used a three pot engine in any of its models and it will replace the 1.2-litre four cylinder block currently used in the cheapest versions of the Octavia.

Prices for the new one are up by just £145 to £16,660 for the hatch and £17,880 for the estate.

Six speed DSG semi-automatic models are also available with the new engine and cost £1,250 more.

In the six speed manuals the new petrol cars are almost £2,000 less than the cheapest diesel Octavias and with fuel economy rated at 62.7mpg plus emissions of 103g/km it makes the newcomer hugely cost effective.

The TSI engine, which VW uses in the up! city car as well as in the latest Golf, develops 115ps and has a zest to perform with 0 to 60 taking 9.9 seconds and a top speed claimed to be 126mph.

For a little engine, weighing only 78kg, that is outstanding and it also possesses a surprising amount of torque - 200Nm to be precise - pulling in a healthy fashion throughout the rev range.

It is very refined to drive with noise levels in the cabin extremely low.

On a drive on the country roads and motorways around the Skoda factory in the Czech Republic where the Octavia is built, we saw an average fuel return of 60.1mpg - nothing to be sneezed at and in real world conditions close to that you can expect from the diesels.

The new engine is arriving at the same time as Skoda is giving the Octavia a little pep adding some extra kit including a wireless phone charging pad, full Wi-Fi connectivity on high end sat nav systems and the convenient option of an onboard umbrella stowed under the front passenger seat.

Higher powered models - that's those with engines developing 150ps or more - now come with dynamic chassis control as an £850 option which adjusts the feel of the steering and suspension for a sportier drive.

It's best experienced on the hotter vRS models and we sampled the new system on an all-wheel-drive vRS 2.0-litre diesel where it made the car feel much more compliant and intuitive on changing road conditions.

The adaptive set up comes in various modes including sport, eco and comfort and each has its own characteristics with the sport setting the tautest and the most rewarding.

Other improvements arriving on the latest Octavias include a lens washer for the rear view camera and tablet cradles fitted to the backs of the front headrests allowing rear seat passengers to enjoy online connectivity on the move - subtle additions but all part and parcel of Skoda's strategy of making its cars very user-friendly.