Jeep is gearing up to challenge the Land Rover Freelander for the compact SUV crown.

The Compass is the first Jeep to offer fuel economy in excess of 43mpg from its 2-litre Volkswagen-sourced diesel engine.

A 172bhp 2.4-litre petrol engine with a choice of manual or automatic gearboxes will also be available.

The new model is also Jeep's first to feature two wheel drive, with independent suspension for improved on-road comfort and handling, although a four wheel drive 'Freedom Drive' 4x4 system can be specified.

Jeep's new Compass marks its first foray into the compact sport-utility market, which has been dominated by the Land Rover Freelander.

Peter Lambert, managing director at Chrysler Group UK said: "Customers are increasingly interested in family hatchbacks with four-wheel drive systems as they offer better handling and enhanced safety on the road."

Launching in May, the Compass will be priced from £17,990.