Ryan Bubear spends some time with the 320Nm Renault Megane 1.6 dCi...

Grin-inducing grunt and wallet-pleasing efficiency — something much of the motoring world wants in a single vehicle, but something manufacturers very rarely achieve.

So, is diesel the answer? Well, the oil-burning hatch has become immensely popular in Europe (it's catching on here, too). And, in strictly numerical terms, it certainly presents a strong case for itself.

As does the new-generation diesel engine recently added to the already broad Renault Megane range (read our review of the Megane GT Line here). The downsized 1.6 dCi is a fair bit quicker and a full 20 percent more efficient than the 1.9 it replaces, and boasts a CO2/km figure of just 104g (yes, Minister Gordhan, that's well under the taxable threshold).

Best of both worlds?

The 96kW turbo-diesel engine makes use of extensive technological wizardry — much of which Renault says was gleaned from its success in Formula 1 — to churn out a truly astonishing 320Nm (the same as the far larger capacity VW Golf 2.0 TDI), while still returning a quoted average fuel consumption of 4.0 litres per 100km.

On paper, that looks amazing. By squeezing that much torque from a mere 1598cc, Renault has created what it claims is the most powerful production diesel engine of this size. And the big benefit is that it retains — or potentially betters — the typical fuel economy of a small capacity diesel. Sounds too good to be true, doesn't it? Sort of like a PhD-collecting beauty queen looking for love on the internet...

Well, as is the case with online dating, real-world experiences seldom align perfectly with cited facts and figures. While we never really expected to match the claimed fuel economy figure (we managed a respectable 5.7 litres per 100km despite a fair bit of thrashing), we were somewhat surprised by the character of the engine. The problem isn't a lack of grunt, but rather that it all arrives in one, dense lump. Hard-to-ignore turbo-lag means there's very little response to a heavy right foot's instructions until about 1700rpm, when suddenly all hell breaks loose... and then it's over as quickly as it started.

Look, it's a marvellous feat to conjure 320Nm from this small an engine — and it's certainly usable once you figure out how it prefers to be driven, keeping the tachometer needle in the small powerband as much as possible — but it just doesn't shout "performance" as we had hoped. Rapid progress can indeed be made (the 0-100km/h dash is completed in less than ten seconds), but the burst of power in each gear is simply too short-lived. We know it's a diesel, but we were still left craving longer, more linear outlays of oomph.

Refinement a strong point

However, the rather refined 1.6 dCi engine does have its positive points. It is remarkably quiet on the highway, has a silky smooth six-speed manual gearbox, features stop/start technology and benefits from something Renault calls Energy Smart Management — the recovery of energy generated under deceleration and braking to relieve the engine by isolating the alternator during moments of low efficiency. Very smart. The suspension setup, too, is praiseworthy, providing a decent mix of handling and comfort.

The five-door Megane 1.6 dCi is available in just one (generous) trim level, and boasts five-spoke 17-inch alloys, LED daytime running lights, and a Renault key card as standard. Inside, the Dynamique model gets automatic headlights and wipers, electric windows, leather steering wheel, cruise control/speed limiter, manual air-con, nifty sound system (CD, MP3, Bluetooth, USB, Aux), and the pièce de résistance, an integrated TomTom Live navigation system.

Charcoal cloth seats do duty in the cabin, and contrast nicely with the silver accents on the dashboard, steering wheel and air vents. The instrument cluster is a visual highlight, featuring a white-faced central digital speedometer sandwiched between a dark-faced rev-counter and a trip computer display. Space is plentiful too, and the boot can hold some 372 litres, or 1162 litres with the rear seats down.

The Megane 1.6 dCi is a pretty car, although the dark "Glazed Chestnut" paintjob on our test unit didn't quite do its curves justice. It sports an array of safety features too. ABS, EBD, EBA, six airbags, Isofix mountings, and fog-lights all come standard, as does a comprehensive five-year or 150 000km warranty and five-year or 100 000km service plan.

The Megane diesel hatch has plenty going for it. On paper, it beats most opponents hands down, sports a flashier standard trim level, and is priced quite a bit more attractively too.

However, unlike the best of its competitors, some effort is required to keep the engine on the boil — which makes it very un-diesel-like. When you want to travel with any sense of urgency, it has to be worked hard, which of course negatively affects fuel economy.

But if you're not bothered by turbo-lag and think "throttle response" is how one reacts to being strangled, it'll keep your visits to the pumps blissfully infrequent.

It may not provide as huge performance thrills as we had hoped — well, not for extended periods, anyway — but it can certainly prevent huge fuel bills. Which, after all, is the big attraction of diesel.

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Click through to page 2 for specs and pricing.