Big car, small engine. From a technical point of view, it's an idea whose time has come. The manufacturers have been wringing more and more power and torque out of their engines for years now, and so far, customers seem mainly to have been happy to carry on buying cars with the same sizes of engine as before and to take the bonus in the form of improved performance.

But there is an alternative; to reap these advances in terms of economy instead. That means accepting a smaller engine that offers about the same levels of performance as before but much better fuel economy.

A number of manufacturers have already offered convincing small-engine/big-car combinations of this sort – usually diesels. The best so far is probably the 1.5 litre diesel version of the Renault Laguna estate which works because its engine is quite sweet and willing to rev; it's very hard to match the mixture of space, comfort and economy offered by that car. Mercedes has quietly gone big-car/small-engine in a big way too; a "250" badge on the boot of a C-Class or an E-Class no longer signifies a 2.5 litre engine – in the case of petrol it's 1.8 litres and in the case of diesel it's 2.15, although turbo-charging means that for both, the performance at least meets the expectations created by the badge. Perhaps the most interesting big-car/small engine combination on the market is offered by Skoda, which does a 1.4 litre (petrol) turbocharged version of the impressive second-generation Superb; I'd love to tell you what that's like, but last time I asked Skoda they didn't have one for me to try.

Anyway, another big car with a small engine has turned up – and a pretty good one it is too. Volvo was already offering economy-oriented DRIVe versions of its smaller cars, the S40 saloon, the C30 hatch and the V50 estate, fitted with a 1.6 litre diesel engine. Now it is offering the same concept, using the same engine, in its big S80 saloon and V70 estate, cars that are usually bracketed with, say the Audi A6 or BMW 5-Series. It sounds unlikely, but after covering several hundred miles at the wheel of an S80 DRIVe, I can confirm that this combination works, and works well.

My test of the eco-S80 consisted of sharing a drive, spread over two days, between Volvo's UK headquarters in Marlow and Milan's Malpensa airport, a distance of almost 800 miles. The purpose of the exercise was to test the S80's formidable – in theory, at least - range and the results were very impressive indeed. I had imagined in advance that we would need to resort to the full repertoire of economy driving techniques in order to succeed but in the event, it proved almost embarrassingly easy to get to Milan without running out.

We made heavy use of the cruise control for the entire journey and left the air conditioning off, too, although that didn't cause any hardship on a chilly autumn run through northern and central Europe. In the mornings we travelled at about 60 mph, mainly running in the inside lane of the motorways that made up most of our route; on both days we then increased our speed to an average of about 70mph in the afternoons in the interests of time-keeping. Apart from staying off the accelerator in order to exploit the long descent from the Gotthard Tunnel to the Italian border, that was the extent of our concessions to economy driving. When we arrived in Milan, we still had a quarter of a tank of fuel left, which the Volvo's on-board computer told us would allow us to travel another 265 miles before running out; the S80's tank holds seventy litres (or about 15.4 gallons) of fuel, implying an average consumption of well over 60 mpg.

So if the S80 DRIVe succeeds spectacularly in terms of fuel consumption, how does it perform in other areas? The first thing to say is that in normal use, it doesn't feel remotely underpowered; the 1.6 litre diesel is smooth and has a wide spread of torque. Some potential customers are bound to be put off at the brochure-reading stage because they won't believe such a small engine can convincingly power such a big car but just about everyone who tries it is bound to be converted.

The DRIVe package on the big Volvos is, perhaps, as interesting for what it doesn't include as what it does. You will search in vain, for example, for a six-speed gearbox, a fancy stop-start system to prevent the engine idling during traffic light stops, or little flashing “change up” lights designed to prompt optimal gear-changing behaviour; apparently, one reason why these features haven't been included is that they would not improve the S80's or the V70's CO2 emissions by a big enough margin to bring any tax savings. One change is the adoption of an electric power steering pump as a fuel-saving measure; I can't say conclusively whether that results in much loss of steering feel as our straight motorway trip to Milan, log as it was, scarcely provided a single opportunity to corner in anger.

Otherwise, the DRIVe version has most of the pros and cons of the standard S80. That means a slightly more relaxed feel than some harder-edged German rivals provide - but all the traditional Volvo strengths as well. Our long trip emphasised the benefits of the S80's outstanding seats, which must be among the best on the market, as well as Volvo's excellent ergonomics; the S80's instrumentation and switchgear appear unremarkable but long acquaintance shows just how well thought out they are compared with the superficially fancier set-ups found in some other cars.

Volvo only expects a minority of S80 buyers to opt for the DRIVe versions but I think it's probably the pick of the range.

Volvo S80 DRIVe

Price: £22.245 (SE), £24,245 (SE Premium)

Engine: 1.6 litre four-cylinder turbodiesel, 109 horsepower, 240 Newton metres of torque

Transmission: five-speed manual

Top speed: 118 mph

Acceleration: 0-60 mph in 11.7 seconds

Fuel consumption: 57.7 mpg (combined cycle)

CO2 emissions: 129 g/km

Rivals: Ford Mondeo ECOnetic, Skoda Superb Greenline, Volkswagen Passat BlueMotion

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