It's becoming a familiar theme: a smaller engine takes the place of a larger one, and brings with it just as much (if not more) power and better fuel efficiency. 

One of the latest examples of an automaker doing more with less is Volkswagen, which is phasing out its 2.5-liter naturally aspirated 5-cylinder engine in favor of a fresh 1.8-liter turbocharged 4-cylinder. The first models to receive the small-but-peppy engine are 2014 versions of the Jetta, Passat and Beetle.

Like the older 5-cylinder, the new turbocharged-4 makes 170 horsepower. But it produces more torque -- 184 lb-ft vs. 177 -- and that's relevant because it's torque that equates to acceleration, such as pulling away from a stop. Even more important than those numbers are the ones pertaining to fuel economy. With the new engine, efficiency improves by 17 percent in the latest Beetle, for example. And unlike many other turbo engines, VW says this one runs just fine on regular unleaded vs. the pricier premium grade.

Also see: New engine, other updates for 2014 Volkswagen lineup

We had a chance to put VW's new engine through its paces recently in 2014 models of the Passat and Jetta, and came away impressed at just how much verve this engine has. We're even more impressed that buyers on a budget can nab a Jetta with this engine for a steal at under $20,000. More on that in a bit. First, we put this little engine to the test in a relatively large car: the 2014 Volkswagen Passat

Powerful enough for a Passat

Small engines powering small cars are one thing, but asking something under 2.0 liters to move a modern midsize sedan is something else. Yet the 1.8-liter is a willing partner in the Passat. Volkswagen's midsize sedan performed just fine as we pushed it over hill and dale in California's Napa Valley. With the new engine the Passat felt light and agile. We wouldn't call its acceleration blazing, but we'd have few hesitations if we needed to get this vehicle up to speed every morning on a freeway on-ramp. As with other such force-fed engines, there is some "turbo lag" -- where it takes a moment for the engine to get the car up to speed after you mash the accelerator pedal. Thankfully, moving the gear shift to Sport mode helped minimize this.

The 1.8-liter engine will eventually be used in all models of the Passat that employ the 5-cylinder, but for now it's only available on SEL Premium versions, which have a sticker price of over $31,000 -- a $10,000 premium above base models. As laudable as this new engine is powering the Passat, at this price point it's still just as easy to recommend TDI models with a turbodiesel engine. That small and mighty powerplant feels like a natural fit in the Passat, and it's even more of a fuel sipper than the new gasoline engine. While Passats with the new gasoline engine attain up to 34 mpg, the TDI easily trumps that figure with highway economy of 40 mpg for automatic models and 43 mpg for those with manual transmissions. If you're keen on the new gasoline engine but can't quite afford a $30,000-plus Passat, patience will pay off as it gradually makes its way into lower-priced trims. 

A bargain Jetta that's a blast

Here's where the value proposition gets a whole lot better, no waiting required. VW has already introduced the 1.8 to all 2014 Jetta models that formerly used the 2.5. While the new engine hasn't quite reached the very basest of Jetta models -- the $17,540 S still uses an anemic 115-horsepower 4-cylinder -- it does arrive in the next lowest trim, the SE that starts under $20,000. 

Being smaller and lighter than the Passat, Jettas fitted with the new engine feel like they have a new lease on life. The 2014 Jetta is notably quicker -- 0-60 mph arrives in as little as 7.3 seconds vs. 8.0 for older models. Combined with the multilink independent suspension now standard on all Jettas, the latest version of this compact sedan had us grinning with its newfound athleticism and agility. It feels like a slightly tamed version of the performance-oriented Jetta GLI, which will have to share the spotlight with its now-also-turbocharged lower-cost sibling. And that's not the end of the story. With either the 6-speed automatic or a 5-speed manual transmission, this latest Jetta is rated at 36 mpg/highway, up to a 5 mpg gain over past models. It's a wonderful union when frisky driving dynamics meet frugal fuel economy. 

When quipped with an easy-shifting manual transmission, a 2014 Jetta SE has a highly appealing starting price: $19,715. Opt for the automatic and it's still budget-friendly at $20,815. That's a tempting proposition, and not just because of the Jetta's eager new engine. At those prices you also get faux leather interior, heated and partial power-operated front seats, and an iPod-ready audio system.  

The Jetta is VW's best-selling vehicle, so it's easy to understand why the company has introduced its newest engine across the broadest range in that model. Thanks to the heart transplant, the Jetta has gone from a recommendable but relatively ho-hum compact sedan to one that gives us something to be excited about, especially for buyers on a budget.


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