Citroen have managed to tap into the psychology of the UK market probably better than any other car manufacturer of late. Their formula has been to catch 'em young, tempting buyers with a credible badge that, with cashback, discounts and free insurance policies, make the cars as affordable as bargain basement Koreans. This tactic has been spectacularly effective, twenty something C2 buyers often maturing into not-so-young C4 buyers and so on. Tapping into these buyers' sense of value is the Citroen C3 HDi diesel range, a set of supermini-sized cars that are as easy on the eye as they are on the pocket.

There are two diesel engines from which to choose developing 70 and 92bhp respectively. The least powerful unit is a 1.4 eight-valve unit and it's the one we look at here, priced from £10,995 and offering economy of around 66mpg. The diesel engine certainly suits the personality of the C3. In the C2, Citroen retain a small car that begs to be taken by the scruff of the neck and flung at the nearest corner, but as its bigger brother, the C3 is a little more restrained.

The car has been sharpened up dynamically in recent years but the tauter suspension and enhanced steering feel stop well shy of the sportiness threshold. If you've owned a very early C3 model, you may also notice the interior and exterior restyling that Citroen indulged in a few years back.

"The 70bhp 1.4-litre diesel unit endows the C3 with enough muscle to effortlessly undertake motorway overtaking maneuvers"

The upright seating position gives the first clue as to the C3's intent. Fire up the engine and you'll be greeted by an initial muted hacking which almost instantaneously settles down into a low-key thrum. Citroen having excelled themselves in insulating the powerplant to such an extent that when out on the open road, only the punchy swell of torque gives the game away. The all-alloy 1.4-litre direct injection diesel may well seem familiar to some and it is indeed the same engine that at various times has been used by Peugeot and Ford - at least in the eight-valve guise featured here. The reason for its popularity is because it's a fine engine, built around the almost obligatory common rail architecture and given respectable performance by the fitment of a small turbocharger.

All-in, the engine generates 70bhp and when combined with the C3's lighter overall weight and longer gearing, it manages not only to return better economy figures than a similarly-powered old-shape Fiesta, but also manages to outsprint the little Ford. True, you won't buy a C3 1.4 HDi for its performance, but the eight-valve engine's sprint to 60mph in 13.4 seconds is perfectly adequate, as is its top speed of 103mph. These figures probably won't set your trousers alight, but this engine has 25% more torque than the 1.4-litre petrol unit and endows the C3 with enough muscle to effortlessly undertake motorway overtaking manoeuvres without recourse to anything as undignified as a downchange.

Although the £10,995 sticker price can look a bit steeper than comparable rivals, Citroen dealers will no doubt pull some sort of financial rabbit out of their hats to sweeten the deal. On top of that, the Citroen is notably better equipped. Clever safety-conscious electronic features have been borrowed from the larger C5 - things such as speed-sensitive intermittent wipers with rain sensing activation, hazard lights that deploy automatically under severe braking as well as side airbags, ABS with EBD, Emergency Brake Assist and comprehensive pedestrian safety features. If you want more, a plusher Rhythm model with this engine is offered at £11,495. This comes with lateral airbags, fog lights, body-coloured front and rear bumpers and side rubbing strips, plusher interior trim and the option of a full size electric glass sunroof, perfect for those sunny summer days.

The interior still looks adventurously styled - which makes a change from all the other makers who seem to be slavishly aping VW Group products. As a result, instead of a dull Teutonic cabin, we've got one that goes its own way, light and airy with low window lines and bold, sweeping curves. The digital instrumentation is clear and easy to read and has a Saab-style 'black panel' that turns all but the most important functions off if you don't want to be distracted by them at night. The rev counter that arches across the top of the digital speedometer is a classic Citroen design cue and one that fits well with the novel design philosophy. The innovation certainly doesn't stop there. Citroen's Moduboard system is a load bay dividing system that helps protect soft items from hard, clean from grubby and prevent bulky objects from racing across the load bay during spirited driving.

The C3 1.4 HDi certainly hasn't ducked the challenge of taking on some tough rivals. Accomplished cars such as the SEAT Ibiza, the Ford Fiesta, the Toyota Yaris and the Volkswagen Polo all mix it pretty well with the baby Citroen dynamically. Which means that if you then figure in the value equation, it's possible that the Citroen may emerge on top in the long run. We certainly wouldn't bet against it.