Long overdue, Subaru's first diesel engine arrives in the Legacy and Outback

Away from the attention seeking Impreza the bigger Legacy is the true bedrock of the Subaru line up. Bigger and more mature, the Legacy, especially in estate form, is the default choice of country folk the length of the land. Roomy, reliable and with that signature four-wheel drive security the only thing that's been missing has been a decent diesel engine. Not any more. Critics will argue Subaru has been the last to join the diesel bandwagon but the firm instead claims a world first: an oil burning version of its signature 'boxer' flat-four engine, never before seen in a passenger car.

After dismal sales in 2007 Subaru is pinning high hopes on its new engine, too. Indeed, the firm's UK operation reckons it could have sold another 4,000 cars last year with a diesel in the line up. And when full production comes on stream next year it expects 85% of Legacy sales to be oil burners. The engine's flat-four configuration offers unique benefits too. It's much shorter than a conventional in-line engine and can be mounted lower in the chassis for better weight distribution. It's also much more balanced, the opposing motion of the pistons cancelling out vibration for improved smoothness and refinement. But has Subaru joined the party too late?

For a first attempt the new engine's figures are impressive. This comes despite Subaru eschewing technology like piezo injectors, as used in most modern diesel engines. The new engine delivers 148bhp and 258lb ft of torque, compared with 168bhp and 258lb ft from the most powerful variant of the VW group's all pervading 2-litre PD diesel - an impressive achievement for Subaru. Combined fuel consumption is 49.6mpg and the CO2 is 151g/km - again bang on the money. All this translates to a 0-62mph time of 8.5 seconds - a whole second faster than the 2-litre petrol Legacy estate, a car which chucks out 212g/km of CO2 and manages just 31.4mpg.

It feels great out on the road too. Subaru's claims of class leading refinement seem entirely valid, the boxer engine's inherent smoothness meaning there's none of the usual clatter or vibration. Sure, from the outside at tickover there is no hiding its diesel rattle. But with a few revs on the dial it evens out and spins up to the redline like a petrol engine, with little more than a slight whine from the turbo. There's no clumsy thump of torque either, the power delivery proving very progressive and linear. Diesel fans might feel a bit short changed in this respect but if you're used to petrol engines you'll be pleasantly surprised.

The diesel Legacy features new electrically powered steering, the better for fuel economy. Unfortunately this comes at the expense of feel, and the wheel is disappointingly light to the touch with little in the way of communication. This is a shame, because the Legacy is naturally very nimble, turning in quickly and feeling very light on its feet. It's definitely tuned for comfort rather than speed though, the long travel suspension great for swallowing the bumps but resulting in dramatic roll in the bends. Once you get used to it it's fine though, and the great visibility and relative slimness means its great for threading down narrow country lanes - very much this car's natural habitat.

Subarus commonly get a bit of a hammering for their plasticky interiors but the Legacy is better than most. The centre console and some of the dials and switches still feel a bit flimsy and there's no escaping the fact that European rivals feel a lot more premium. But it's roomy and comfortable, with a great driving position and up to 1,649 litres of space with the seats down - that's 150 litres more than a C-Class estate and only 36 litres less than the cavernous Mondeo. Equipment is generous too, with all models getting dual-zone climate control, memory seats, rear ventilation controls, Xenon lights and cruise control - not bad for a starting price of £19,995.

For all their appealing quirks Subarus have always been thirsty. The new diesel engine changes all that and in a stroke the Legacy is up there with class rivals, even with the added burden of its four-wheel drive chassis. Indeed, compared with cars like the Mondeo and Passat estate the Legacy is bang on the money, and even marginally better on fuel economy and carbon emissions. A standard fit particulate filter also helps the car's green credentials, not to mention the fact that the engine's layout means the catalytic converter gets up to working temperature around 20% faster than conventional in-line engines.

For a first attempt the new diesel engine is hugely impressive. The flat-four design offers unique benefits and the smoothness and keenness to rev are a revelation. The lack of a six-speed gearbox or auto option is an issue though and those expecting a torquey, muscular diesel power delivery will be disappointed. The power is there, you just have to drive it differently from most diesels. Don't expect this to put people off though. Subaru's established - and very loyal - fanbase will love it and with this engine the Legacy deserves to break out of its niche and earn Subaru the volume sales it so desperately craves.