Sector: Lower Medium Price: £21,965 Fuel: 78.5mpg CO2: 92g/km

Mercedes-Benz has started upgrading its A-Class hatchback, with the introduction of the A180 CDI ECO SE. Replacing the previous A180 CDI SE, the ECO package incorporates an aerodynamic grille element, underbody panelling and lowered suspension (-10mm at the front and -15mm at the rear) to reduce drag to just 0.26.

Longer ratios in the six-speed manual gearbox, an improved energy recuperation system and a lightweight fuel tank all contribute to fuel savings, with Mercedes claiming that 78.5mpg should be possible, up from 74.3mpg. This also results in a further 6% drop in emissions, to just 92g/km.

That means that this entry-level A-Class is free from UK road tax, qualifies for 100% capital allowance until 2015 and sits in a BiK company car tax band of just 13%.

Despite the focus on emissions and fuel economy, the A180 CDI ECO SE retains the same 109bhp output from its Renault-Nissan sourced 1,461cc engine, backed up by a strong 192lb.ft of torque. This is enough for relatively spritely performance and the compact Mercedes is easily capable of keeping pace with traffic in town.

The longer higher gears make for relaxed cruising too, with hardly any engine noise once up to speed. With just one person in the car there is enough power to accelerate in the upper gears, so the ECO SE doesn’t require constant gearbox stirring to maintain a motorway pace either.

The lowered suspension doesn’t turn the SE into a Sport model, though it does provide a fairly firm ride. Our test car was equipped with winter tyres, which may have contributed to a slight rise in road noise too.

Other than that, it was standard A-Class SE fare and none the worse for that. If more space is required, the ECO package is also available on the B180 CDI ECO SE.