DESPITE the fact that most Australians still have a hard time accepting the advantages of modern diesel-powered cars, Mercedes-Benz has brought forth its meritorious C220 CDI.

It is a car as sumptuous, attractive and dynamically competent as the rest of the new C-class prestige sedan range, and which offers an exceptional blend of frugal fuel consumption and good engine performance.

Yet few are destined to leave the showroom floor. Were there marked advantages at the petrol pump - in terms of price per litre and cleanliness - as well as a widespread appreciation that high-tech oil-burners such as these are in fact clean, efficient and powerful, there could still be other sticking points such as the high sulphur content in Australian diesel fuel.

Most European prestige car manufacturers have products overseas to rival the C220 CDI, all of which meet the tough European emission regulations, however some local operations refuse to offer them here because of sulphur-related doubts over engine longevity. The BMW of 2001 is one of them.

For its part, Mercedes-Benz makes a persuasive case in its favour and, having assessed the C220 CDI on its merits, we can concur that it would indeed be an intelligent choice in this segment if a great set of fuel figures and a good spread of power were both considered vital.

At the heart of the matter is a new 16-valve, four-cylinder engine featuring a variable turbocharger and a common-rail (or high-pressure) injection system. Like most other modern diesels, power output and standing-start acceleration times are less impressive than the amount of torque at the driver's disposal - and in this case, the C220 CDI can produce an excellent 315Nm between 1800rpm and 2600rpm.

Such a plethora of torque from low engine speeds ensures good tractability around the suburbs and a strong accumulation of speed once out on the open road.

It is not a seamless surge of power, though, for while a hesitation between accelerator pedal input and actual propulsion is something of a trademark with Mercedes-Benz, the sense of lag is heightened by the emphatic propulsion that comes when the turbo kicks in at just over 2000rpm.

The engine maintains excellent refinement and shows little evidence of its diesel status above idle speed - unless the driver revs it out to 4000rpm or beyond. It's not worth it. Power doesn't plummet like some diesels but the accompanying noise will send a message to the brain to back off.

The simple-to-use, one-touch sequential manual gearbox will also do its best to discourage engine exploration, overriding a selection if it deems the resultant revs too high.

Quite emphatically, this is an engine/transmission combination that rewards the patient driver - but in the same breath let us add that overtaking moves are not fraught with danger and that the intelligent five-speed automatic auto will read a situation through the driver's use of the throttle and respond with the appropriate gear selection.

Fuel economy is perhaps the most outstanding aspect of the C220 CDI. We travelled more than 800km across our city/country test loop and returned an average consumption below eight litres per 100km.

More than that, the drive also reminded us just how good the C-class has become. General open-road refinement is excellent, braking performance reassuring, the ride comfortable and composed and the rear-drive handling characteristics better than ever.

It is an idiot-proof arrangement: a bias toward understeer and standard fitment of the ESP stability control system that keeps the tail in check. Yet it is also more inviting to drive than the C-class of yore, thanks in no small part to a new steering system - rack and pinion as opposed to recirculating ball - that is nicely weighted, more communicative and quite direct.

We might mention, too, that the turning circle is a tidy 10.8m.

Not only more spacious than its predecessor in a few of the critical dimensions, the C-class cockpit is a much more modern, functional and entirely pleasant place to be. Quality of build and materials used is outstanding, comfort levels for the driver and front passenger are high and the controls are clustered in a variety of thoughtful positions.

That said, a fair amount of time is required to learn the ins and outs of the stereo and steering wheel-mounted controls while the brain, accustomed to seeing full-size needles in the instrument pod, takes a while to settle in with the otherwise fresh, uncluttered panel that relegates all but the essential gauges to a central digital display.

There are pleasing aspects at every turn: overhead grabhandles neatly recessed into the overhead trim, useful door grabhandles, thoughtful positioning of child seat anchorage points, a rear ventilation outlet on the Elegance trim tested here, three-point seatbelts and headrests throughout and the full complement of airbag protection front and rear.

There are some oddities, too, including the unusual combination of electric and manual adjustment on the front seats, a bootlid that opens with a little too much gusto and placement of a skiport and split-fold rear seat into the options bag.

Most adults will also find the rear seat room restrictive.

Though never destined to become the people's choice Down Under, the C220 CDI will make complete and utter sense to those who want no more than acceptable engine performance and a more economical alternative to the petrol-engined models in the C-class range.

No hang-ups allowed.