Worthy to challenge the premium marques

But some of the so-called premium saloons and estates like the BMW 3 Series and Mercedes C-Class had better be on their guard when sales of the new, eighth generation Passat start this month.

It has sleeker looks, a significantly bigger interior packed with technology for more comfortable and safer driving, improved dynamics, better fuel economy with lower tax bills – all in a package which, on the outside, is slightly smaller.

Indeed, it isn't just the driver and front passenger who get all the benefit: there are few cars in this class which could compete in terms of space in the rear or cargo carrying ability, whether you choose saloon or estate.

There's more headroom, too, so that a six-foot passenger can comfortably travel in the rear seats behind a six-foot driver, and boot space in the saloon has risen to an impressive 586 litres – as practical as rival hatchbacks.

For even more serious load lugging the estate version is among the most capable in its class, holding up to 1,780 litres with the rear seats folded flat.

Power comes from four versions of VW's four-cylinder turbo-diesel, rated at 120PS (117bhp in old money) through 150PS and 190PS up to a whopping 240PS reserved for the range-topper with 4MOTION all-wheel drive.

They are up to 14 per cent more economical than their predecessors, meaning lower fuel and tax bills. The entry-level 1.6 at £22,215, for example, is capable of averaging a fraction over 70mpg and falls in VED band B. Yet it is still capable of completing the benchmark 0 to 62mph dash in 11 seconds and of cruising refinement to match a much more expensive premium model.

An even more frugal Bluemotion version boasting 78mpg and 95g/km of CO2 – ie no annual car tax to pay – will be here by the summer and the range will be joined by a petrol alternative, the 1.4TSI, towards the end of the year along with a petrol-electric hybrid.

The new car is just a couple of millimetres shorter overall than its predecessor, but the platform has been radically redesigned to stretch the wheelbase and shorten the overhangs, with consequent benefits in riding, dynamics and freeing up more space inside.

Its also wider and 14mm lower, which along with its new, more aerodynamic face and aggressive-looking lights give it a more sporty appearance. It's also lighter, contributing to the improved performance and economy figures.

The first test was in the 2.0 litre, 150PS in SE Business trim, which as its name suggests is aimed at the fleet market and is the model VW predicts will be its biggest seller.

My first impression was one of levels of refinement normally 'repmobile'.

It was fitted with a DSG twin clutch gearbox, which in normal driving works on quite a narrow rev range so you have to listen hard to hear the engine at all – that's mostly reserved for a 'kickdown' or manual down change when overtaking.

The steering isn't heavy, but is well-weighted to give you a comforting feeling of control and the Passat is supple enough to smooth out bumpy B-roads but not so soft as to wallow around quicker corners. There's no noticeable bodyroll to upset quesy passengers, either.

With big, comfortable seats (with electric angle and lumbar adjustment in this model), it's a car you'd feel happy to choose

for a long journey as well as a trip to the shops.

The interor, even at entry-level, has an upmarket ambience which combined with its practicality and dynamics makes it a serious contender in the executive express market.

This £25,135 business express is targeted to keep company drivers and their fleet managers happy, with sharp performance (under nine seconds to 62mph) and fuel consumption of almost 63mpg, with a consequently low CO2 figure of just 106g/km and a VED Band B rating.

GT spec (which refers principally to a trim level rather than performance) is nonetheless the first in the line-up with the option of the 190PS diesel engine.

It cuts the 0 to 62mph sprint time to under eight seconds and endows the Passat with a coupe-like feel, proving its new chassis dynamics are up there with the best.

It only stops being coupe-like at the pumps, because it's still capable of 60mpg and a surprising VED Band C rating.

Top of the range, in both specification and performance terms, are the 4MOTION models which use VW's well-proved four-wheel drive system to put the power down safely whatever the weather.

Prices start at £34,510, for a whopping 240PS of power and 500Nm of torque. Both are impressive figures for a mere 2,000cc capacity dieselL engine and the 6.3 second sprint time would have been verging on petrol supercar territory just a few years ago.

Not many of them, though, would have got anywhere near a fuel economy figure of 53mpg.

It's the torque probably more than the power rating which makes progress, including overtaking, feel effortless.

As you'd expect of a family car, all Passats come well equipped with a communications/infotainment system based around a multi-function colour touchscreen in the centre console, capable of connecting with a range of today's electronic devices.

There is a range of storage solutions, front and rear, and a full range of safety equipment from front, side, curtain and knee airbags to the latest stability and braking systems. The Passat is officially rated as one of the safest on the road, with high marks in all categories of the EuroNCAP safety tests.

Step up SE trim and you also get a speed limiter and adaptive cruise control, to help you keep a safe distance from the car in front, plus a city emergency braking system to prevent those all-too common rear-end shunts around town.