Volkswagen are phasing out their 1.6-litre petrol engines, replacing them with a turbocharged 1.4 across its model range.

The 1.4-litre TSI comes fitted with a sophisticated turbocharger boosting performance despite a decrease in size.

Power increases from 113bhp to 120bhp while pulling power gets a 30 per cent hike from 114lb/ft to an impressive 155lb/ft.

The benefit of using a smaller engine is clearly reflected in its economy and carbon dioxide figures.

Fuel economy rises from 42.4mpg in the 1.6-litre FSI Golf to 44.8mpg in the 1.4-litre TSI. Carbon dioxide emissions go down from 161g/km to 149g/km.

The new engine will be fitted into the Golf, Golf Plus, Jetta, Eos and Passat, being mated to either a six-speed manual gearbox or a seven-speed DSG automatic gearbox.

Models fitted with the 1.4-litre TSI and manual gearbox go on sale immediately. The innovative DSG gearbox is available at the start of 2008.

The new engine increases list price by £150 on smaller models, and £175 for the Passat saloon and estate.