To the untrained eye, the medium range market is much of a muchness but delve a little deeper and you'll discover it's like a layer cake. At the bottom are the big Korean value options, above which sits the real mainstream stuff from the likes of Ford and Vauxhall. Spend a little more money and you get the more aspirational brands like Honda and Volkswagen. Next up come the likes of Alfa Romeo, Saab and Volvo, with Jaguar and Lexus sitting just below BMW, Audi and Mercedes at the top table. There are social climbers, however, and the Volkswagen Passat TDI170 is a model that punches well above its weight.

It's not hard to see why. Perform a blind test and you'd swear that the Passat cost a good deal more than, say, a 2.2-litre diesel Jaguar X-TYPE, although with prices starting at £21,425, it's still nearly £2,000 cheaper (not to mention significantly more powerful). Even specified in luxury SEL guise with the revolutionary twin-clutch DSG sequential manual gearbox, you'll still be looking at a price of just £23,500 - a mere £90 over the price of the entry-level Jaguar. If you want to see brand management at work, this same engine in an equivalent high-end front wheel drive Audi A4 would set you back over £25,000. As a compromise between affordability and the nagging suspicion that you're getting worked over for a desirable badge, the Passat TDI 170 walks a very well-judged line.

The benchmark engine in this sector had long been BMW's 163bhp 320d but that looks to have changed with the advent of this punchy 170bhp diesel. It's not only got the drop on the BMW in terms of power output, it also does a number on the Munich unit in terms of torque, the 320d fronting up with a peak figure of 251lb/ft as opposed to the Passat's 258. The BMW may still appeal to more coorporate buyers on account of its lower CO2 emissions, but the Passat is a much more spacious car and will attract customers who need a genuine five seater. Opt for the six-speed manual and you'll still only churn out 160g/km - less than a Kia Cerato 1.6.

"Research definitely pays off when you're choosing a car like this. The more info you unearth, the better the Passat TDI 170 looks"

Volkswagen achieves this through a number of measures, not least of which is a clever four-cylinder direct injection system that makes better use of every drop of diesel. The injectors on all four cylinders are controlled by a single powerful electronic control unit (ECU) which carefully adapts the amount and mixture of fuel passing through into each cylinder. Having developed this, the engineers decided that the obvious next step was for each cylinder to have its own ECU unit; the fuel amount and mixture could then be even more carefully monitored and even greater efficiency achieved.

This engine also features Piezo injectors that precisely meter fuel delivery to provide more power and even stronger performance. Featuring a high-pressure pump and rail for the four cylinder engine, the Piezo system permits up to five separate amounts of fuel to be injected on each working stroke at an injection pressure of 1,600 bar - 250 bar more than with previous common rail systems. This helps to achieve the best possible fuel/air mixture and an even more efficient combustion process. Environmental impact is also minimised by a diesel particulate filter, which is fitted as standard and works in conjunction with the twin catalytic converters to maximise exhaust gas cleansing. The system needs no additives, and so will need no servicing throughout the lifespan of the car.

That's the technology taken care of and the net result is a car that anybody can enjoy, just as long as they can stump up the asking price. With nearly 170bhp under the bonnet, it certainly doesn't hang around. The headline figure with this model isn't the power output but the maximum torque output of 258lb/ft. The BMW 330i, the Ford Focus ST, the Mercedes SL350, the Porsche Cayman S, and the Subaru Impreza WRX all fail to top this figure. Torque is simply defined as rotational force and it's best to think of it as the engine's muscularity. With this sort of torque on tap, you can rest assured that this Passat isn't going to get sand kicked in its face. Acceleration figures from rest never do a diesel car justice and the 0-60 figure of 8.3 seconds sounds brisk rather than concussive. A more indicative test is the 30-70mph time through the gears and here the Volkswagen is quick enough to give many of the cars listed above a real scare.

Team the 2.0-litre TDI with the revolutionary DSG (Direct Shift Gearbox) and you'll have a very satisfying ride. This uses a sequential manual gearbox in order to ensure efficiency and rapid responses, but it also uses a clever twin clutch system to ensure creamy smoothness. Engage first gear and the gearbox will pre-engage second gear in advance, the second clutch engaging as soon as you flick up to fire the Passat instantly into second gear. This means a seamless flow of power. The electronics predict what gear you're about to engage, depending on whether you're accelerating or braking, and the result is astonishing, making every other gearbox look distinctly clunky. The other option is to slip it into 'D' and drive it like a normal automatic. Even in this mode it's butter smooth. One comes away with the impression that some day all gearboxes will be made this way.

Ask yourself some serious questions and it's hard not to come to the conclusion that Volkswagen's Passat 2.0 TDI 170 offers one of the best value propositions anywhere in the medium range sector. In many respects it makes more sense than the genuine cheapies. The market is never going to be flooded by them, residuals are going to stand up very well and once you've got over the initial purchase price, you have a very sophisticated saloon that's not expensive in terms of ongoing costs. A little knowledge can be dangerous if you're trying to market a top end brand.