Every car is a compromise, but here’s one that sounds more attractive than most: BMW’s new 320d EfficientDynamics offers similar performance to a regular 320d, but with better economy, lower emissions and lower running costs.

The secret is a new 163hp diesel engine. Though it’s less powerful than the regular 320d, it delivers the same maximum torque – and that means the EfficientDynamics car is just as quick in real terms.

BMW has worked hard to ensure that the new engine is particularly smooth at low engine speeds – where diesels often lack refinement – and there are longer gear ratios to encourage the driver to keep the revs down, which aids economy. In addition the new car has 16-inch wheels with Michelin EnergySaver tyres, and aerodynamic improvements thanks to a slightly lower ride height and new low-drag alloy wheels.

On the road the 320d EfficientDynamics delivers all the usual 3-series virtues – excellent build quality inside and out, wieldy handling, handy size and premium image – along with 320d-style performance, but at the same time returning the best fuel consumption figures of any 3-series. Low CO2 emissions also mean you pay just £20 a year in Vehicle Excise Duty, £70 less than you would with a regular 320d, while for company car drivers the Benefit in Kind tax is about £225 a year less.

Better still, the 320d EfficientDynamics costs £125 less than the similarly-equipped 320d SE. The only drawbacks are that it’s available only as a four-door saloon – you can’t choose a coupé, convertible or Touring estate body, as you can with a regular 320d – and the options list is much more restricted than the regular 320d. But those are the only compromises you have to make.