Motoring: The City car to be seen in

Like a rash, City cars are just about everywhere at the moment. Well, that's the idea of course. They are meant to be cheap, small, easy to park and yet practical, with good manners on the open road.

Ideally, City cars ought to be all the vehicle that most of us will ever need. That doesn't mean they have to be boring, quite the opposite. Cheeky, cute and even radical, is in.

Take a look at the Ford Ka. It was the last thing you would expect of such a conservative company. So when it was announced that Volkswagen was joining the small car set, it did not settle for a shrunken Polo. Nope, VW has radicalised the SEAT Arosa.

Apparently Volkswagen had developed the car two years ago, but decided that its Spanish subsidiary needed a small car in its model range more urgently. It also gave the production facility in Germany time to get the build quality spot on. What they have come up with is a familiar enough shape, which means the Lupo has the wide body, short tail and big doors of the Arosa, but also a much more radical front end and interior.

In come round headlamps and circular indicators for that now crucial dose of cheeky styling. Inside though, the revamp has been even more ambitious with a total and rather radical makeover. So is the Lupo as loopy as it looks, or just a clever repackage? Well it is a bit of both really.

Starting on the inside, the Lupo is certainly spacious. Driver and passenger have as much room as they would in the bigger Polo. Indeed, the Arosa has the Polo's dashboard, but Volkswagen let its interior designers off the leash. The result is more Alfa Romeo than staid old VW. There are two hooded dials, speedometer and rev counter finished in alloy-look silver with fake allen bolts ringing the edge for a surprisingly sporty look.

The driver grips a thick, nicely finished air bagged steering wheel with a confident VW badge in the middle. Build quality and instrument/control layout is faultless and there is a simple centre console for the radio and that must-have feature, the cup holder. In fact VW has included lots of its larger car touches by having chrome door locks, damped action on the cupholder and grab handle, plus a blue backlight to the instruments. Small touches, but important ones.

VW haven't forgotten that the Lupo is meant to be practical so there are plenty of shelves and bins for odds and ends. There is a narrow tray below the radio and another below the ventilation controls, plus a shelf which runs the length of the dashboard. Access to the rear is easy thanks to an optional facility which slides the entire front seat forward when the backrest is folded. Once there, most adults have adequate legroom thanks to the sculpted front seat backs.

Although VW claims the Lupo is a five-seater, really it's a two-seater, with an occasional facility for two more, or permanent children who have the upholstery to keep them amused. Yes really. The European seat trim option even includes a cartoon cat called Tim on doors and Tom the mouse on the seat fabric. Such conclusive proof that Germans have a sense of humour is unlikely to make it onto UK spec vehicles. Pity.

On the road, the Lupo is pretty much as the Arosa, although the choice of engines is set to be considerably greater. Whereas the SEAT is available with a 1.0 litre petrol and 1.7 litre diesel, the Lupo adds a 1.4 litre 16 valve. There is also a more powerful 100bhp version, possibly badged a GTI, on the way and also a turbo diesel next year.

For the moment though, when the Lupo goes on sale next January we could choose the 1.0 litre which is perfectly adequate around town, but feels underpowered if you stray onto a dual carriageway. That's why the more flexible 1.4 16 valve makes the better all-round option, feeling quite eager when pushed and very refined too so that it is not too wearing at speed. Lots of sound proofing material also helps.

Another engine ideal for the long haul is the 1.7 diesel which returns ridiculously low consumption figures, well into the 50mpgs without undue effort. However, it does not have the overtaking punch of the petrol 1.4 which easily keeps up with traffic, however fast it is moving.

The bottom line is the price, expected to start at just under pounds 8,000 for the 1.0 litre. The specification will probably include twin airbags and ABS brakes, but wouldn't you be better off with the cheaper SEAT? Well you would not be any worse off. Build quality is very high and handling is safe in both models, although the VW offers the more versatile 1.4 engine.

It also has the more prestigious badge and even has extra design touches which should convince younger drivers that the hip interior and front end is the City car to be seen in. Not only that, the styling won't frighten off more mature drivers who will like the solid construction and chrome door handle touches, reassuring them that this is yet another quality, if slightly smaller VW product.

The Lupo can't lose.

Specification box

VOLKSWAGEN LUPO

Price: from pounds 8,000.

Engine: 1390cc four cylinder, 16 valve, 75bhp at 5,000 rpm. Five speed manual. Performance: 0-62mph in 12 seconds. Combined fuel consumption 45mpg.

RIVALS

Fiat Seicento: pounds 6,495-pounds 7,495. Good value package, not any more roomy than model it replaced. Harsh out of town.

Ford Ka: pounds 8020-pounds 9820. Brilliant to drive, still amazing to look at, engine getting old though. Still City car class leader.

Seat Arosa: pounds 6,995-pounds 8,230 Lupo with conventional styling and lower prices. Limited engine choice. Competent, but not chic.