KIA is to launch its first plug-in hybrid electric vehicle turning the latest Optima saloon into a car with a claimed fuel economy of more than 170 miles per gallon.

The high-tech model will be available from October and is arriving at the same time as the Korean car maker is launching a stylish estate version of the executive grade five seater.

Both are competitively priced and in the case of the hybrid its £31,495 price tag, after the Government grant for low emission vehicles makes it the cheapest family-sized plug-in on the market.

That's something of a coup for Kia since the PHEV alternatives in this league come from the German big hitters - BMW, Mercedes and Volkswagen.

With emissions of just 37g/km the Optima PHEV offers huge tax advantages on the company car scene with business users facing only a seven per cent charge.

Like all plug-ins the Optima can be driven in pure electric mode or as a petrol/electric hybrid to conserve battery power and eke out the miles.

Kia claims a zero emission range of 33 miles on a full charge - which is done by hooking up to an external power point - and the Optima's lithium-ion battery pack can be completely replenished in under three hours.

That's quicker than most at the moment and the beauty of plug-ins is that when the battery power is close to exhaustion there are no anxieties about range as the car switches over automatically to run on its petrol-electric powertrain.

We put the Optima PHEV through its paces in and around the bustling streets of Kia's home town of Seoul in South Korea, setting off with the batteries showing a 90 per cent charge giving the car an EV range of 27 miles and an overall distance of 402 miles.

For everyday motoring the Optima showed fantastic potential and although its regenerative braking system - which helps boost the batteries on the move - added only a few miles to the pure electric range the Optima's hybrid performance was top class.

Kia is relatively new to the hybrid scene launching its first petrol-electric model, the Niro crossover, only a few weeks ago.

The Optima PHEV moves it rapidly up the ladder as a serious eco brand and the Korean technology is impressive.

A longer run would have been needed to get a full picture of the Optima PHEV's overall economy but the onboard systems - of which there are many showing powerflow, battery state and eco driving style (where good performance is rewarded by the growth of a tree-like graphic) - showed an average fuel economy in the mid-50s putting the PHEV easily on par with a diesel.

Town driving is exceptionally quiet and even at motorway speeds the cabin refinement is above average.

The interior is well trimmed, it is very roomy front and back but with the battery pack slung under the rear of the car boot space is reduced to 307 litres and the fuel tank is reduced in size by almost three gallons to 12 gallons.

The regular model has a capacious 500+ litres of cargo space but even so the PHEV can handle an adequate amount of luggage.

Realistic range on a single tank of fuel and driving the car in hybrid mode where it works out the optimum energy flow automatically is going to be close to 700 miles - a little more than you would expect from the Optima diesel, even with its larger fuel tank.

For zero emission work around town the PHEV can be switched into pure EV mode and Kia's claim of around 30 miles on battery power appears realistic.

The plug-in powertrain comprises a 154bhp 2.0-litre petrol engine mated to an electric motor giving a total output of 202bhp, enough to deliver a 0 to 60 acceleration of 9.4 seconds and a top speed of 121mph.

Again that is quite similar to the performance of the 1.7-litre diesel Optima although the hybrid is a fraction quicker through the gears and comes with a seven speed auto transmission which is smooth and effective.

Acceleration is lively enough and Kia has made changes to the steering and brakes to accommodate the hybrid equipment and the extra weight - up 200 kilos over the standard Optima saloon to almost 1.8 tonnes.

There are some aerodynamic tweaks too, such as active grille shutters to smooth out airflow at speeds and some subtle style upgrades using hints of blue in the headlamps, around the nose and on the car's ECOplug-in badges which can be found on the wings.

There are also restyled bumpers and a rear splitter all of which help the PHEV stand out from the diesel model.

In fact, the design is so slippery that Kia claims a lower drag co-efficient than that of the likes of the Toyota Prius or the pure-electric Nissan Leaf.

Officially, the Optima PHEV is rated at 176.6mpg - better than the BMW 330e - but as with all plug-ins that figure is completely fanciful.

It's all down to how the car is used and under the right circumstances the potential for savings is huge. A daily commute of 30 miles will cost only a few pounds and is unlikely to burn any petrol.

The Optima's battery charging point is housed behind a flap on the front nearside wing which is convenient for hooking up to domestic and roadside chargers and the necessary cabling is stowed within the boot.

Even though the car is full of electronics Kia has kept its seven year, 100,000 mile transferable warranty for the plug-in and like all Optimas equipment includes wireless phone charging pads, an eight-inch touchscreen, sat nav and smartphone connectivity.

It may be Kia's first shot at a plug-in but it is an impressive salvo that works well and delivers excellent economy complementing the existing battery-powered Soul EV and the new Niro.

All are part of a crusade for the brand to reduce emissions by at least 25 per cent come 2020 - and that means there will be more to come on the fuel saving front.