Volkswagen Beetle 1.2 TSI

Price: £18,895

Engine: 1.2-litre four-cylinder petrol, turbocharged

Top speed: 111 mph

Acceleration: (0-62 mph): 10.9 seconds

Transmission: seven-speed DSG

Power: 105 PS at 5,000 rpm

Torque: 175 Nm at 4,100 rpm

Fuel consumption (combined cycle): 47.9 mpg

CO2 emissions: 137 g/km

The 2012 Beetle is the third car to carry that famous name but it also represents an interesting first. The 1999 'New Beetle' set the fashion for small retro cars, and, where Volkswagen led, BMW and Fiat followed with the reinvented Mini and 500. Now, the 2012 Beetle is the first replacement for one of these retro models. That may not sound like a very important milestone but ever since Volkswagen, BMW and Fiat first plundered the designs of their most interesting old cars for inspiration there has been a certain amount of fretting about the “second-generation retro” problem – how to produce an interesting and fresh-looking successor to the first reinvented car while still remaining true to the character of, in this case, the 1938 Beetle.

Volkswagen appears to have overcome this supposed difficulty with a handsome car that looks better than its predecessor and is a much more subtle, less clunky obvious take on the rear-engined original – I suspect Fiat's similarly excellent work on the design of the 500 was a spur here. The new model has a flatter roof than before, and looks lower and wider. Under the skin, it leans heavily on the Golf, in this case the A5 platform of the Golf V and VI, rather than the Golf IV/A4 base used for the 1999 car, which makes for a predictable choice of Volkswagen engines as well as a familiar on-the-road feel. It also means, of course, that unlike the original, the modern Beetles have front-mounted engines and front-wheel drive.

Five engine options are offered on the new car in the UK; three petrol and two diesel. The petrol options are all turbo-charged power units from Volkswagen's TSI range – a 1.2-litre delivering 105 PS, a 1.4 (160 PS) and a 2.0 (200 PS). The less powerful of the two diesels is a 1.6, which benefits from Volkswagen's BlueMotion package of economy measures such as stop-start, and provides 105 horsepower. Fuel consumption according to the official combined cycle measure is 65.7 mpg, and CO2 emissions are 112 g/km. The 1.6 is joined by a more powerful 2.0-litre that delivers 140 horsepower.

There are three trim levels. The base car is simply called Beetle; the more expensive variants are, in ascending order of price, called Design and Sport. The most basic version is actually pretty well kitted out. Its equipment list even runs to a DAB (digital) radio, still a comparative rarity on affordable cars, although it doesn't get alloy wheels (available for £370, but standard with the higher trim levels). The main reason for going for the Design option is that its alloy wheels and covers are quite similar to the steel wheels and hubcaps fitted to some original rear-engined Beetles; pair these with the right paint colour, which on the Design, but not the other trim levels, is carried over to the main dashboard panel, and you can achieve a very pleasing retro look indeed. I'm not sure the most lavish Sport trim really works for me, mainly because luxury and sportiness aren't really traditional Beetle attributes, and also because the other trim levels are fairly generous anyway. One interesting detail in which this car differs from its predecessors, ancient and modern - previous Beetles were never badged as such but 'Beetle' decals are among the personalisation options available for this one.

I drove 1.2-litre and 1.4-litre TSI petrol models. The 1.2 is only available at present in conjunction with Volkswagen's self-shifting seven-speed dual-clutch DSG transmission. This is an excellent combination, giving the Beetle a fairly lively feel. The 1.2 TSI engine provides more than enough go for most British road conditions and the superb DSG gearbox makes the best use of the power available. It even feels sporty enough to have you reaching for non-existent steering wheel mounted shift paddles - perhaps Volkswagen should think about fitting them. I also tried the 1.4-litre with a manual transmission. This provided a useful edge over the 1.2 in terms of power but felt equally refined.

Prices currently start at £16,490 for the basic car with a 1.2-litre TSI petrol engine and the seven-speed DSG 'box. The same car will also be available later on with a manual gearbox, and given the typical premiums for DSG on other VW models, that one should come in at about £15,000. Adding optional alloy wheels should give you a very stylish car indeed for about £15,500 but the DSG gearbox and the Design trim package are worthwhile ways of spending your money too. Together, they increase the price to £18,895, but I suspect there will be plenty of takers.

If there is a grumble about the latest Beetle it is that its – for the most part actually rather good – driving characteristics are already very familiar from the countless Golfs, Octavias and so on with which it shares many of its parts, and there's nothing like the distinctive optional two-cylinder TwinAir engine that gives the Fiat 500 so much of its character. But that quibble apart, the latest Beetle is a good effort, a much more serious affair than its slightly superficial and gimmicky predecessor.