If you still identify Volkswagen with the uncomplicated—and mechanically simple—original Beetle, it’s time to update your thinking. Times have changed, and the focus at VW is now on technology and modern design. The recently launched Golf VI provided a strong hint of where VW is headed with its high-volume cars, but it’s this new Polo that really lights the way. See, the Golf VI is burdened with many carry-over parts from the Golf V, a.k.a. Rabbit, whereas the Polo is the first all-new car from the latest leadership group at the helm of Vee-Dub. “What you see here is VW design for the coming 10 years,” the company told us at the car’s launch in Sardinia. “This car we designed from scratch. A simple, crisp design leading to the future—which will be a lot different from the present.”

Compared with the dull-looking outgoing model, the new Polo is a breath of fresh air. The lower and wider body defines simplicity. Details such as the small horizontal grille strip, the silver wing in the headlights, and the L-shaped rear lighting will resurface on other new VW models. The look, we say, can’t migrate too soon to the Jetta and Passat. Whereas the three- and five-door hatchback versions of the Polo won’t come to the U.S., we hear that a four-door sedan, which would be produced in Mexico, is considered a strong candidate for American sales.

As Usual, Europeans Have Many Engine Choices

On the Continent, the Polo is offered with three naturally aspirated gasoline engines: two 1.2-liter three-cylinder units producing 60 hp and 70 hp and a 1.4-liter four producing 85 hp. Three variations of a 1.6-liter turbo-diesel producing 75, 90, or 105 hp also are available. A 105-hp, 1.2-liter turbocharged TSI four will hit the market soon, and a Polo GTI with 170 to 180 hp from a 1.4-liter TSI—similar in style to the Wörthersee concept car—is a done deal, too.

We didn’t get a chance to drive the hottest Polo, the GTI, but the turbocharged 1.2-liter TSI emerged as our favorite engine so far. It spools up noticeably around 1800 rpm and feels very much alive from just beyond 2000 rpm up to the 6000-rpm redline. By contrast, the naturally aspirated 1.4 feels reserved and is far slower to respond. With the three-banger engines, the Polo is hopelessly underpowered outside city traffic.

We also drove the two lesser TDIs and came away impressed with both. The 90-hp unit is sporty and responsive up to 5000 rpm, and even the 75-hp turbo-diesel pulls strongly enough for most situations. Earth-friendly types will be impressed by the BlueMotion equipment, including an engine start/stop system, offered with the 90-hp diesel. So equipped, combined fuel economy rises as high as 65 mpg in the optimistic European cycle.

The seven-speed, dual-clutch DSG automated manual—optional on the 1.4, the 1.2 TSI, and the 90-hp TDI—is a first in this segment, offering far better fuel economy than the simple four-speed automatic transmissions typically used in this class. But alas, it isn’t a whole lot more fun. We drove it in the 105-hp, 1.2-liter TSI, and it shifts unobtrusively in standard mode but never begs you to play. A sport mode improves things quite a bit, but at the expense of mileage. The standard six-speed manual transmission, on the other hand, is a perfect match for the 1.2 TSI. All other versions of the Polo come standard with a five-speed manual.

Relatively Comfy, Very Safe

The Polo doesn’t have the character of a tiny econobox; it’s quiet and comfortable enough to let you survive a long journey. The chassis is responsive and has a sophisticated feel. To keep rear passengers from grumbling, however, we advise you not to push the front seat all the way back. “We haven’t made this car significantly bigger [than the last one],” says Ulrich Hackenberg, VW’s head of R&D. “But we have changed the proportions and thus gained more shoulder room for a more spacious feel.”

The Polo achieves five stars in the Euro-NCAP frontal crash test, and VW claims 15-percent-less side-impact intrusion than on the already good predecessor. Intrusion in the front foot area in a front crash has been improved by 50 percent, with a lower crossbeam that is not only stronger than before but also lighter by half. Electronic stability control is standard for most European countries.

The Polo’s refinement and attention to detail could embarrass far larger cars. It’s arguably the best car in its segment, which includes highly praiseworthy entries such as the Opel Corsa, the new Ford Fiesta, and the Hyundai i20. Luckily for the competition, the VW is also one of the most expensive in its segment. Launching in Europe in the last week of June, the Polo starts at €12,150—$17,000 or so—not exactly bargain basement. Still, VW is already sitting on more than 15,000 orders, and we predict those folks will be very satisfied.