Competition is stiff in the supermini market and finding an edge is more important than ever. Most car makers have gone down the route of efficiency and ‘green’ credentials, but Seat’s plan for success is a little more exciting.

Seat has decided to squeeze its ultra-efficient diesel engine under the bonnet, creating the only diesel hot hatch in its class – the Seat Ibiza FR 2.0 TDI.

The Spanish car maker has effectively created a hot hatch that is free to tax for the first year and won’t cripple you with running costs.

The world is not short of hot Seat Ibizas: there’s the FR, Cupra and Cupra Bocanegra. But the FR TDI is different. It’s capable of more than 60mpg whilst emitting just 123g/km of CO2.

This is not the first time Seat has built a hot diesel Ibiza. This time around, it has taken the previous generation Ibiza FR’s 128bhp 1.9-litre TDI and replaced it with the Volkswagen Group’s latest 141bhp 2-litre diesel engine, giving it a much more refined feel than before.

The common rail system gives it a more polished feel, cutting engine noise for a more comfortable experience.

But despite this comfort, the Ibiza FR TDI is no dawdler. It can accelerate from 0-62mph in 8.2 seconds – or 8.3 for the five-door – and has a top speed of 130mph. This is the first model in the range to get the new six-speed manual gearbox.

Full gallery: the Seat Ibiza FR TDI

This is all important of course, but the Ibiza FR TDI’s headline statistic is undoubtedly its torque: 236lb/ft of pulling power between 1,750 and 2,500rpm. That’s more than a Leon Cupra, Mini John Cooper Works and even a Porsche Cayman – a fact that could well seal the deal for many petrolheads.

Sport chassis

The steering is light, and it has an impressive turning circle, making it easier to manoeuvre at low speeds. But though it weights up at higher speeds, the steering lacks in feel. The chassis is fitted with Seat’s XDS handling system, which brakes the inside front wheel during fast cornering for improved stability and grip.

The suspension has been stiffened and lowered for a sportier feel, which should put a smile on most drivers’ faces. The overall ride is a bit firm but not prohibitively so, making the Seat Ibiza FR TDI an attractive choice as a day-to-day drive.

The FR look is characterised by aggressive bumpers, front honeycomb grilles with a chrome frame, a twin exhaust and distinctive silver-coloured door mirrors. Low-profile tyres, 17-inch twin-spoke alloy wheels and a wide choice of body colours give it an edge in the style stakes.

Unlike the petrol version, this car is available as a three-door Sport Coupe or more practical five-door.

The list of standard equipment is pretty much endless. Highlights include climate control, cruise control, cornering fog lights, a trip computer, hill hold assist, MP3 connectivity and a recommended gear indicator – which tells you which gear to choose for the greatest fuel efficiency.

On the inside, it feels understated and sleek, incorporating contoured seats, gloss black inserts, a bespoke instrument display and ‘FR’ badging. It’s based on the same platform as the Volkswagen Polo so it isn’t the roomiest of cars, but it is plenty for most.

The standard Seat Ibiza scored a five-star EuroNCAP rating and the FR comes with ESP, tyre pressure monitoring and driver, passenger and side airbags as standard.

Frugal and rapid

The new Seat Ibiza FR TDI is practical, good value for money and incredibly likeable. But at £16,840 the 5-door version we drove is marginally more expensive than the Cupra, so why would somebody choose to spend more on a car that is less exciting?

After spending time in the car it seems the two models are aimed at very different buyers. The Cupra is an all out hot hatch, unapologetic in its performance. But the FR combines some of this performance with impressive fuel economy and low emissions. It’s frugal but maintains plenty of the Cupra’s excitement.

This is a car that’s been designed with a young target audience firmly in mind. It is a compromise but, overall, it’s a very good one.

Key Facts:

Model tested: Seat Ibiza FR 2.0 TDI 5-door
On the road price: £16,430 – £16,840
Date tested: April 2010
Road tester: Rhian Angharad Jones