IT'S a sign of the times for Skoda that it is emerging from the shadow of its parent company VW and actually challenging in the same markets.

The Citigo is Skoda's take on the VW up! and SEAT Mii and is every bit as good as its stablemates.

It has helped moved the goalposts with city cars with a spacious interior, good quality finish and budget price. It is also the first Skoda to sport the firm's redesigned badge, giving it an even fresher feel.

It will be cheap to run with a claimed 67.3mpg and emissions of 98g/km exempting it from road fund licence - it also puts the diesel/petrol economy debate firmly on the agenda with petrol a clear winner in this case.

It has a starting price of £7,630 for the entry-level S, but the tested model Elegance, with the extra bells and whiles added on will set you back nearly £10,000.

Like most city cars trying to maximise space it adopts the formula of a box shape with a wheel in each corner. But the styling is much subtler these days and the car does look the part - especially with the optional black alloy wheels.

Available in three or five, door the three door version does have a sportier look as well as being cheaper.

As a result this a big little car with room for four adults in comfort, even if legroom is restricted in the rear.

It also makes clever use boot space with two levels that make one of the biggest in its class and it features a clever split level combination. It further opens up into a generous stowage area with the rear seats folded. Other pockets and cubbyholes are available throughout the cabin.

The dash is neat logical and functional dominated by a large speedo and on the tested Elegance model the PID or portable infotainment device mounted just above which includes Bluetooth, media player, sat  nav and trip computer.

Some of the finish does feel a bit low rent, but then this is a budget car and you can't have it all ways. But as befitting a car who parent is VW, it is well put togher and feels sturdy.

The vehicle is powered by the same three cylinder engine in the VW and SEAT - a free-revving three cylinder one litre petrol engine.

Available as either 60 or 74bhp either feels more than capable with the 0-60mph benchmark figure seeming much quicker than the 13.2 seconds attributed.

It is also economical with the thick end of 70mpg being claimed while CO2 emissions dip below the 100g/km mark, exempting the car from road fund licence.

Add to this a group 1 or 2 insurance rating and you have cheap motoring without the added costs of diesel fuel.

The power is delivered through a slick-shifting five-speed gearbox and while the ride is decent enough the handling is nothing to write home about  which you would probably expect from a short box on wheels.

The car is pretty well equipped at entry level S with electric windows, remote locking height adjustable seats and safety kit which includes stability programme and anti-skid brakes and all round airbags to score five stars on the Euro NCAP crash safety programme.

Move up the range and the goodies increase as does the price taking the tested model to nearly £10,000. But it does feel a comfortable place to be despite being such a small car and that's the trick.

Chances are you will not spend that much time driving it on motorways, but it is just as important to feel comfortable and relaxed in city traffic and this is where the car scores.