KEEPING abreast with the polished BMW 1- and 2 Series and capable Mercedes-Benz A-Class hatchback and sedan is no easy feat. Taking a step ahead of those premium small cars seems almost impossible.

But perhaps “impossible” just isn’t in Audi’s dictionary…

The new Audi A3 – which was released in Europe over 18 months ago and is now finally in Australia – is proof that the Ingolstadt-based brand doesn’t take threats to its small-car superiority lying down. The new model is more capable, efficient, technologically advanced, and safer than ever before, plus, with increased cabin space, it is also closer in size to the previous generation A4 than it perhaps has any right to be.

For upsizing A3 drivers – or downsizing A4 owners – that’s clearly a good thing. But from a distance, and from behind the ‘wheel, the new and outgoing A3 may be difficult to tell apart… and just wait until you check out the hiked-up list prices.

The A3 range’s entry point is now $9700 higher than that of the outgoing model. The 35 TFSI Sportback starts from $46,300 (plus on-road costs) and the 40 TFSI quattro S line from $52,900 (+ ORCs) while sedan models jump a further $900. Despite the increase, the A3 still undercuts its direct competitors from BMW and Mercedes-Benz – the 118i begins at $47,570 (+ ORCs) and the A180 at $48,720 (+ ORCs). For reference, the entry-grade A4 retails for $59,900 (+ ORCs).

A3 35 TFSI models are powered by a 1.5-litre four-cylinder turbo-petrol engine equipped with cylinder-on-demand and mild-hybrid technology. It develops 110kW/250Nm while sipping between 4.9-5.0 litres of fuel per 100km on the combined cycle depending on the body style.

Mid-tier A3 40 TFSI quattro S line variants feature a 2.0-litre four-cylinder turbo-petrol engine developing 140kW/320Nm. The sedan version is said to consume 6.6L/100 km and the hatchback 6.7L/100km.

Standard equipment across the entry-level A3 35 TFSI range now extends to 18-inch alloy wheels, dual-zone climate control, leather upholstery, LED headlights, wireless charging pad, as well as Audi’s 10.25-inch Virtual Cockpit digital instrument cluster. Sportback variants add a powered tailgate.

The 10.1-inch central touchscreen infotainment system incorporates wireless Apple CarPlay and Bluetooth connectivity, Android Auto connectivity via cable, DAB+ digital radio reception and satellite navigation. The myAudi smartphone app, meanwhile, allows access to additional features, including remote lock/unlock, emergency calls, and Audi Service request.

Higher-grade A3 40 TFSI quattro S line variants additionally feature Audi Sport 18-inch alloys, Audi drive mode selector, Audi luggage compartment package, auto-dimming rear-view mirror, interior LED ambient lighting package, and sports seats.

Standard safety equipment includes AEB with cyclist and pedestrian detection, cruise control, lane-keeping assistant, reversing camera and tyre-pressure monitoring. Left-hand drive versions of the Audi A3 scored a five-star safety rating under EuroNCAP’s strict new crash testing criteria.

All A3s are available in a choice of 12 paint colours and with three upholstery colour schemes.

Audi Australia backs the A3 range with a comprehensive five-year service plan package priced at $2250.