Blue is the new green. The next generation diesel offerings from Merc and fellow German VW are so much cleaner than the ones they replace, both brands felt a new colour was needed – blue.

With low CO2 emissions and, more importantly, lower particulates emitted from the tailpipe, DaimlerChrysler has already used its new Blue-Tec technology to break the US with diesel Mercedes. On the other hand, Volkswagen has tried a more ambitious approach. Picking up the mantle from the eco-warrior ‘3 litre Lupo’ that delivered an astonishing 94mpg, the Polo Bluemotion is another engineering triumph, emitting hybrid-beating emissions of 102g/km CO2 (108g/km with aircon) while sipping diesel at the rate of 72.4mpg, giving rise to an enormous 700-mile range.

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How do they do it? VW threw all the technology they could at the 80PS 1.4-litre engine to curb its thirst, while sharpening up aerodynamics and sending the humble little Polo to the fat farm to slim down.

In the flesh you’ll notice a far more handsome car than the gas-guzzler it replaces (which could ‘only’ manage 63mpg). It’s slippery and lower with a light set of new wheels too.

Inside there’s not much evidence of weight chopping, with the familiar and not especially expensive-feeling cabin little changed. Then you start the engine and realise where the weight saving happened – binning the sound deadening. As cheeky as the offbeat three-cylinder may first sound, its novelty soon wears off, and it takes a motorway before its presence finally takes a back seat.

Performance is only acceptable. A narrow rev range and long gearing especially in the top two gears means constant changing and little go – it felt slower than its 12.8secs to 60mph.

We drove the little Polo hard, so it was a pleasant surprise that even in our hands it returned more than 46mpg, boding well for real world driving. However, the low resistance fuel-saving tyres have stiffer sidewalls that harden the ride.

Costs wise, the Bluemotion must be viewed, like hybrids, as a brand-building tool, and like a hybrid expect cities like London to eventually make it congestion charge exempt. The reality is, however, the Bluemotion offers a cheaper, more fuel-efficient alternative to a hybrid fleet and is an interesting alternative way of turning your fleet blue, I mean green.

By the way, next to receive the Bluemotion treatment is the fleet-friendly Passat that promises Prius-rivalling emissions, although both still sit in the 18% tax band because it’s a diesel.