What do you do if you want the punch of a Golf GTI – or, for that matter, one of a fleet of hot hatches currently on offer from Europe, Japan and Korea – but need a little extra room inside?Or, alternately, what if you want a frugal mid-sized family car powered by a diesel engine, but with a little more spice and fanfare than the norm?You go and take a look at Skoda’s new-generation Octavia RS launched this week, and arriving in showrooms a few months after its less performance-focused Octavia siblings.

Skoda has continued its policy of offering both a petrol and diesel option in its go-fast Octavia. You can also have either of these in ‘liftback’ sedan or more capacious wagon body-styles.

Under the skin, though, is VW’s familiar (front-drive) MQB platform that also underpins the Golf and Audi A3. The sharing of mechanicals extends to drivetrains – the Golf GTI and GTD donate their turbo engines to the Skoda cause.

In petrol guise that means a 162kW (up from 147kW) and 350Nm (up from 280Nm) 2.0-litre four-cylinder turbo unit, while the 2.0-litre turbo-diesel offers up 135kW of power and 380Nm of torque between 1750-3250Nm.

To our eyes, the third-gen Octavia is a good looking car, with an understated design featuring clean lines. The subtle changes to the RS, including a new aggressive front bumper, honeycomb grille in the apron, rear diffuser and spoiler add a distinctly sporty style without being over the top.

Skoda has added a similar level of sportiness to the cabin with red stitching on the big steering wheel, gear-shift lever and parking brake, as well as sports seats that give a good level of support without being too tight.

Everything else in the cabin functions as it should with the eight-inch touchscreen housing a number of functions including the sat-nav and audio controls.

The Octavia offers decent leg- and head-room, even in the rear seat, and the wagon features a handy lever in the cargo area to lower the 60/40 split-fold rear seats.

The petrol and diesel versions across both body-styles feature the same standard equipment list. We’d like to see a standard reversing camera, though there are sensors front and rear.

Models sold from mid-year will be available with a Tech Pack that adds a premium sound system, a forward collision mitigation system, adaptive cruise and a reversing camera.

A Driving Mode Selection system that features Normal, Sport, Eco and Individual modes to alter steering feel, air-conditioning and transmission calibration comes in models sold from April, but we did not get to sample it at the launch.

Off the line, the petrol RS has plenty of get-up-and-go across its rev range.

It can dash to 100km/h in 6.8 seconds which is slightly off the (circa-80kg lighter) Golf GTI’s figure of 6.5 seconds but still nothing to be sniffed at.

The six-speed manual is our pick, but the paddle-shifter DSG is as enjoyable at ever in a more dynamic setting. Befitting its ‘Q’ car status, the engine note is subdued – though maybe a little too much.

In (DSG-only) diesel guise, response is a little less immediate than the petrol, with a 0-100km/h sprint time of 8.2 seconds. It feels a little heavier in the nose, though is perhaps the better ‘cruiser’ thanks to buckets of low-down torque.

There is a little too much wind noise to our ears.

Official fuel use in the petrol variant with the manual gearbox is 6.4 litres per 100 kilometres on the combined cycle. The diesel has official figures of 5.2L/100km, we managed a still acceptable 7.9L/100km.

Naturally, the RS is lower and firmer-sprung than its regular siblings, and ride and lower-profile tyres. It also has a modern four-link independent rear suspension system to improve behaviour on B-roads.

Skoda has struck a good balance by making the car firm but not rendering it overdone. The ride is neither wafty nor busy, but somewhere in between. Body control is good, with plenty of composure mid-corner, turn-in is direct and torque-steer is controlled.

It’s no all-paw WRX in terms of traction, and it lacks the manic edge of a Megane RS, but then again, that’s precisely the point. Switch the ESC to Sport, and it relaxes the traction control.

The progressive steering system firms up with speed, from being a little light around town to offering reassuring weight and feel.

So then, what do we make of this cut-price Golf GTI with more room for the kids? As a value proposition, it is strong, despite lacking some standard gear.

Pair this with strong dynamics – up there with a smaller and slightly more nimble hot hatch of a similar price – and the RS remains as enticing as ever, perhaps even more so.