Frugal, fun, clever and competitively priced, it’s a key option, not only for those in the market’s smallest segment but also for people using a compact car of any kind.

Volkswagen values shrunk into compact form ought to bring a very appealing result. You’d imagine refinement. A comfortable ride. And a solid, well appointed cabin. A combination of virtues never quite delivered by the brand’s previous Fox and Lupo citycars – but much in evidence here.

The electric power steering’s light and effort-free in a car as nippy and manoeuvrable as you’d want any city car to be with just under three turns lock-to-lock and a 9. 8m turning circle

In town, the thick A-pillars can limit visibility at junctions and roundabouts but there’s the peace of mind of the City Emergency Braking system. A first in this sector, it’s automatically active at speeds of below 19mph and uses a laser sensor in the upper part of the windscreen to scan the road ahead for potential collision hazards. If one is detected and the driver doesn’t react, the brakes are primed. Should the driver then brake, stopping power is maximised. If the driver doesn’t – or can’t – then the car can automatically brake to a halt by itself. The system can even autonomously apply the brakes if you’re about to be rear-ended. Very clever.

Up front, a cool dished three-spoke steering wheel fashioned from light magnesium frames an instrument cluster of refreshing simplicity. A pity though that it’s only adjustable for height, not for reach. The interior design with its large speedometer is clean and easy to get to grips with, featuring high gloss back trim and a compact centre pod for many of the minor controls. True, there’s no shortage of hard plastics, but this doesn't feel like a car that's been ruthlessly built down to a price like its Fox predecessor. It just feels agreeably minimalist. There is certainly a colourful cabin, with the option of painted body-coloured panels evoking the spirit of the original Beetle. And one that’s well screwed together too: when you turn the air vents to one side for example, they locate with a well-rounded ‘click’. There's loads of storage too, with bottle holders in each of the two doors, a glovebox holder for pens, a compartment for your sunglasses and three cupholders dotted around the cabin.

The cleverest touch is the ‘Maps & More’ portable infotainment system with a neat 5” colour touchscreen you can carry in your pocket or handbag and then clip just above the centre console. It’s a little box of tricks that includes a navigation system, a hands-free telephone unit, a media player and even vehicle information displays. There are four basic menus – ‘Vehicle’, ‘Navigation’, ‘Media’ and ‘Telephone’. In ‘Vehicle’, you’ve a trip computer, door monitoring, parking assist info and the so-called ‘ThinkBlue. Trainer’ that can help you drive more eco-consciously. In ‘Navigation’, which can display in 3D, you can locate everything from local carparks to places of interest. And if you park up and take the screen with you, it can even guide you back to your car if you forget where you’ve parked it. Then there’s ‘Media’, which can play music from SD cards and MP3 players and display your photos. And ‘Telephone’ functions with any Bluetooth smartphone, offering voice-activated control. ‘Maps & More’ can be cleverer still if you download onto it a whole range of apps – but I’ll let your dealer tell you all about that.

This is the very essence of a small, affordable Volkswagen, a high quality class-less car very much in the mould of the original Beetle. One of the lightest small runabouts you can get, it still manages to feel solid, a triumph of packaging and design that’s streets ahead of any citycar the brand has yet brought us. Highlights include superb space efficiency, a brilliant detachable infotainment system and a city braking function that’ll pay for itself in peace of mind. Fortunately, the up! has enough character to make you like it as well as admire it – and that’ll be crucial in an increasingly fashion-led market segment.

If you like the look, then there aren’t too many downsides here. A few rivals can better the running costs – but not by much. Overall then, this is the embodiment of friendly functionality, with potential cleverness you almost certainly won’t be expecting from something citycar-sized. A thumbs up! then? That’s about the size of it.