The final drive ratio is also often referred to as the gear ratio or differential ratio, and it determines the relationship between the engine's revolutions and the wheels' speed.
A higher final drive ratio means that the engine has more torque available at the wheels, which can improve acceleration and towing capabilities. However, a higher final drive ratio also results in higher engine speeds at highway speeds, which can increase fuel consumption and noise.
Conversely, a lower final drive ratio means that the engine has less torque available at the wheels, which can make acceleration and towing more difficult. However, a lower final drive ratio also results in lower engine speeds at highway speeds, which can improve fuel consumption and noise levels.
The final drive ratio of a car is ultimately a compromise between performance and efficiency. In the case of the Skoda Felicia 1.9D, the standard 4.2:1 final drive ratio is a good balance of both factors.