BLUE is the new green as Volkswagen Group Australia launches its new Golf BlueMotion green machine.

A practical and super-efficient hatch, the BlueMotion has an official fuel economy figure of 3.9 litres per 100km, which is the same as the Toyota Prius petrol-electric hybrid, but generates a bit more CO2 at 99g/km compared to the Prius at 89g/km.

But, at $28,990, the green Golf is substantially cheaper than the Prius, despite Toyota having slashed its price to $34,990.

Rather than develop a complex hybrid with a combustion engine and electric motor, VW took the cheaper option of modifying an existing model.

VW chose the 77TDI five-door Golf, running a 1.6-litre turbo diesel engine, as the base and its engineers made a raft of minor changes that together drive down the consumption average by 1.1L/100km.

The four-cylinder common rail diesel engine has largely been left alone, so it produces the same 77kW of power at 4400rpm and 250Nm of torque between 1500rpm and 2500rpm.

VW fitted it with an idle-stop system, which automatically switches off the engine when the vehicle comes to a stop and fires it up again as soon as the driver touches the clutch to re-engage first gear.

This system, which is being rolled out across the rest of the VW range, can be switched off if the driver finds it to be intrusive.

Another fuel-saving feature is a ‘smart’ alternator, which does not draw energy from the engine (to charge the battery) under acceleration and only taps a small amount when cruising. Instead, it draws most of its energy when decelerating to save fuel.

The Golf BlueMotion uses the same five-speed manual as the regular 77TDI, but with wider ratio spacing to improve economy.

Like other Golf manuals, the BlueMotion features a gear selector guide. Located on the trip computer display, this feature shows the driver the gear the vehicle is in and indicates whether a lower or higher gear needs to be selected for optimum economy.

While the 77TDI was also available with a DSG dual-clutch automatic, the BlueMotion Golf was only developed with a manual. It is fitted with hill start assist, which holds the car for a short period until the driver dips the clutch to move off.

The 77TDI has been discontinued here, which means the cheapest automatic diesel Golf available in Australia is now the 103TDI at a hefty $36,490.

Lower sports suspension sits the BlueMotion 10mm closer to the ground for an aerodynamic advantage, while the damping rates have been softened.

Aerodynamics are also in mind rather than looks with the fitment of a front bumper extension and a roof-mounted spoiler at the rear.

VW downsized the wheels from 16-inch rims to 15s and fitted special low-rolling-resistance tyres.

The BlueMotion Golf is similarly specified to the 77TDI except for the addition of Bluetooth phone connectivity and audio line-in including an iPod connection. Electronic stability control is standard, along with seven airbags and anti-whiplash front headrests.

Other standard equipment includes cruise control, air-conditioning, a leather-wrapped steering wheel, heated wing mirrors, folding centre armrest, tyre pressure monitoring system and a digital audio system that can display information from digital broadcast radio stations such as track and artist name.

Like the 77TDI, the BlueMotion Golf has cloth seat trim, but it has a unique combination of black and, naturally, blue fabric. The driver’s seat is height-adjustable while the rear seats provide 60/40 split-fold convenience.

Volkswagen replaced the space-saver spare wheel with a tyre repair kit to cut some weight, but the boot space remains at 350 litres.

The BlueMotion colour palette is limited to just four choices – silver, grey, white and blue.

At $28,990, the BlueMotion is $1000 more expensive than the discontinued 77TDI manual, but Volkswagen argues the extra technology and features are worth more than that.