Sometimes being an engineer has to be depressing. You have a eureka moment, design a product of almost divine brilliance and the general public don't get it, you're hamstrung by inept marketing, the economic climate changes by the time the product comes to market or a combination of all of the above and some more besides. When Volkswagen introduced their 1.4-litre Twincharge engine in the Golf, it expected take up to be strong. Here was an engine of 1.4-litre capacity with good fuel economy yet which served up 170bhp and kicked out more torque than a BMW 330i, a Ford Focus ST, a Mercedes SL350, or a Porsche Cayman S. Did we buy it? I think you know the answer to that question already.

Volkswagen has instead gone back to the drawing board and reduced the complexity and cost of that engine, offering it in solely turbocharged guise in its Golf (and Jetta, Eos, and Passat ranges) with a more cost conscious focus.

Volkswagen hasn't gone totally back to basics with this one. The 121bhp power figure this car generates is still quite something from a 1.4-litre petrol unit. Those with long memories will remember another 1.4-litre turbocharged hatch and will be minded of how times have changed. Whereas this Golf isn't even classed as a warm hatch, the Renault 5 GT Turbo was deemed almost antisocially rapid with its 115bhp power output. How weights change too. That Renault weighed 850kg whereas the much bigger Golf will tip the scales at around 1300kg, laden down with airbags, soundproofing and silicone damped controls.

".this 1.4-litre turbocharged engine looks like a winner"

Offered with a six-speed manual gearbox or a seven-speed DSG twin clutch sequential manual 'box, the 1.4TSI replaces the 1.6-litre normally-aspirated engine and brings a 30 per cent torque increase. With 200Nm of torque available anywhere between 1,500 and 3,500rpm, this Golf feels a lot stronger than its modest capacity suggests. The DSG gearbox is an interesting piece of kit, this seven-speed version being mounted transversely. The shifts remain lightning quick and the logic of the full 'automatic' mode has been improved to prevent spurious up and downchanges.

Some vehicles age remarkably quickly where others stave off the ravages of time with measured good grace. The Golf Mk V is certainly one of the latter. Since its introduction, Volkswagen has nipped and tweaked at it to keep it looking fresh and the Golf remains one of the cleanest-styled cars in a market sector that has started to rely on the gratuitously odd in order to get attention. Interior space is amongst the best of any family hatch.

Otherwise, things are much as you'd expect from a Golf. Both three and five-door bodystyles are available and there's plenty of room to stretch out. The interior finish keeps the Golf near the top of the family hatch tree. It uses a fascia design reminiscent of the Phaeton luxury saloon, although the centre console is lifted from the Touran mini-MPV. With the exception of its pricier Volkswagen Group cousin, the Audi A3, the cabin has the beating of anything out there as regards ambience. The interior features soft-feel slush-moulded plastics, high-quality switches, subtle use of chrome, fabric-covered A-pillars and blue instrument backlighting with red needles.

Two trim levels are offered with the 1.4 TSI turbocharged engine; entry-level S and better-equipped Match. The S is available in three-door guise from £14,270 on the road and for another £500, the five-door car is available. This is then also offered with the DSG seven-speed gearbox which tacks another £1,330 onto the asking price. Given that Volkswagen options aren't cheap (satellite navigation will run you £1,580 on the Match model) the DSG gearbox doesn't seem that exorbitantly priced.

The Match opens at £15,445 for the manual and £16,845 for the DSG-equipped car, this trim level adding 15-inch alloy wheels, iPod preparation, cruise control, automatic lights and a leather-trimmed multifunction steering wheel to a Golf S specification that already includes air conditioning, anti lock brakes, stability control and six airbags. View these prices in the light of a 1.4-litre hatch and they do appear quite expensive, as a 2.0-litre Ford Focus with 143bhp is cheaper than the manual Match model but the Golf feels better built inside and many people will spend a little more for the feeling that they have bought a premium product. If you need more space, this engine is also available in the slightly larger Golf Plus.

One thing that all mainstream Golf models have in common is a vice-like grip on residual values that is quite remarkable for what is essentially a volume production car. The key to this is the equity of the Volkswagen badge and the 1.4 TSI looks set to be no exception in terms of residuals as it blends affordable cheap running costs and brilliant build quality. Ongoing costs are certainly on the manageable side, the 1.4 engine managing an economy figure of some 44.8mpg while the old 1.6-litre's carbon dioxide emissions of 161g/km have been pared back to a trimmer looking 149g/km. Choose the DSG gearbox and it's even greener at 139g/km, something business users may well be able to make a convincing case for.

Yet despite all these advances, prices have crept up over the 1.6-litre outgoing car by just £150 which seems like fair business for such a manifestly superior engine. Insurance ratings are low, reflecting the fact that his model isn't offered in any of the sporty trims.

The Golf 1.4 TSI is an interesting and rather pragmatic development for Volkswagen. Some manufacturers would be unable to swallow their pride if a prized project failed to catch the public's imagination but the Twincharge engine that spawned this powerplant will probably come good again when the value proposition has been refined a bit. In the meantime Volkswagen is ploughing ahead, this 1.4-litre turbocharged engine looks like a winner and the fact that it's being used not only in the Golf but also in the Eos, Jetta and Passat ranges underscores Volkswagen's belief in it.

Pricing still looks a little optimistic although there is probably some scope for negotiation with your dealer to shave a few pounds off. Although some will note that this is a 1.4-litre engine for the price some rivals are charging for a 2.0-litre unit, the Golf TSI might just be the smarter choice when economy and emissions are taken into account.