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With diesels, hybrids and electric cars all now on sale, it would be easy to dismiss the petrol engine as yesterday’s technology. But the Nissan Micra DIG-S proves there are still ways to find more efficiency from petrol power, even after a century or more of development.

The DIG-S engine uses a combination of technologies to achieve diesel-rivalling economy (and less than 100g/km of CO2, which means road tax is free) without sacrificing refinement or performance. In many engines fuel is injected into the air stream going into the engine, but here the fuel is injected directly into the cylinder. This has the effect of cooling the air, which helps to improve power and reliability. Unusual valve timing maximises the amount of energy extracted from the burning fuel. And there’s also a supercharger, which pumps extra air into the engine when needed. The more air an engine breathes, the more power it can produce – so this 1.2-litre, three-cylinder motor punches above its weight.

It’s a characterful little engine with an eager sound. Inevitably, with such a small capacity, it can struggle a bit if you insist on driving around in high gears at low speeds, but it really comes alive when you rev it hard. Driving it like that will do nothing to aid fuel economy, of course, but it does mean the tiny motor delivers lively performance, and it remains fantastically smooth right up to the red line. It’s a shame, then, that the Micra’s ride and handling don’t meet the same high standards: it’s safe and predictable, but rivals like Ford’s Fiesta make a much better job of floating over road imperfections and changing direction neatly.

The Micra struggles to match rivals inside, too, with low-rent surfaces on the dashboard and doors, and a steering wheel crowded with buttons. Where it scores is in practicality, because it’s easy to get into and see out of, there’s plenty of headroom in the back even for adult passengers, and the rear seat can be folded neatly forward to leave a capacious load area with a flat floor.

There are plenty of rivals with more even ability, but if you want a small hatchback that is cheap to run and easy to live with – and you don’t like the idea of a diesel – the Micra could be the car you’re looking for.