Last year, Fiat's 875cc, twin-cylinder turbocharged engine won the 'International Engine of the Year' award, seeing off competition from Ferrari, BMW and Audi, among others.

The award highlighted the importance of the new breed of tiny, efficient engines, and rumors began to surface that Volkswagen would make its own two-cylinder unit.

That rumor has now been confirmed, as Volkswagen has announced the Up minicar will get a twin-cylinder diesel unit.

According to Autocar, Volkswagen R&D chief Ulrich Hackenberg says the engine will be an adaptation of the engine in the XL1 concept.

While the Fiat TwinAir engine is gasoline-powered, Volkswagen is using its expertise to create a diesel twin-cylinder, which should return even greater economy--particularly in the light-weight Up body, only 2,050 lbs in the current car.

The TwinAir gets impressive combined economy of nearly 56 mpg in official tests, but many have found it difficult to average more than 33 mpg without driving quite gently--though the engine is frequently praised for its fun-to-drive nature. We noticed this when recently testing another car fitted with the engine, the UK-market Chrysler Ypsilon.

Volkswagen also hinted that its three-cylinder engine--as fitted as standard to the Up--could also appear in cars on the new MQB platform, like the new VW Golf.

The 3-cylinder unit is a modular design, closely related to the Golf's family of four-cylinder gasoline engines, so installation would be fairly simple.

Both two- and three-cylinder engines could also find their way into the Volkswagen Taigun crossover, should that vehicle be put into production.

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