Love to have been in the meeting where a bunch of grubby engineers announced to sharp-suited VW marketing execs they were replacing the excellent 2.0-litre FSi engine with a weedy 1.4.

The marketers’ shock must have been priceless. Sure there’s a climate of downsizing, but shouldn’t an engine that small live under a supermini’s bonnet? As the suits’ despair verged on anger, imagine one of the engineers leaning forward and calmly announcing his new engine produces more power, uses less fuel and has a lower CO2 output compared with the 2.0-litre they were about to bin.

The TSI manages this economical feat by cleverly combining a supercharger and turbo to allow engineers to use a small-capacity engine.

But why use both types of forced induction and not just turbocharging? Turbos use exhaust gases generated from the engine to spin turbines to pump fresh air back into the engine. Problem is, turbos only come on-line once the engine is spinning fairly high, meaning there is a delay, known as turbo lag. To cure this, VW added a supercharger that is engine-driven and boosts from low revs, but unusually, once the supercharger’s delivered its best at 3500rpm it is disengaged to let the turbo get on with its good work.

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The last application of both turbo and supercharger was back in the 80s, when Lancia used the technology to win rallies, whereas VW is using it to win business buyers. The new engine produces 170PS, averages 38.2mpg on the combined cycle and emits 175g/km, helping it to slot into the 22% BIK tax bracket. In perspective, that’s 20PS more than the 2.0-litre while improving average economy by 2.9mpg and dropping 3% in BIK bandings, all for an £820 premium. Performance on paper is in another class, and the 0-62mph dash drops a second to 7.9secs.

Despite the slightly gruff engine note at low revs there’s punchy acceleration from almost idle that barely lets up. It’s so good that once on boost the boundary between TSI and GTi almost start to become blurred.

Around town the TSI’s more forgiving ride and smaller 17-inch alloys means it’s a comfortable and formidable tool.