BMW Australia has finally responded to Audi’s all-conquering Q5 by releasing a larger, more luxurious and more hi-tech second-generation version of its mid-size luxury SUV, the X3.

The all-new US-built F25-series X3 joins its larger brother – the X5 – in Australian BMW showrooms this month, charged with arresting its seven-year-old predecessor’s sales slide of more than 50 per cent last year and more than 90 per cent so far in 2011.

While BMW’s pioneering X5 continued its reign as Australia’s top-selling luxury SUV last year ahead of its nemesis, the Mercedes-Benz M-class – as well as the Lexus RX and Q5 – Audi’s relatively fresh medium SUV has shot to the top of the luxury SUV sales chart in the first two months of this year as its BMW, Benz and Lexus rivals suffered serious plunges in popularity.

Now comes the Q5’s most formidable foe yet in the shape of a new three-variant MkII X3 line-up offering more interior space, comfort and value, plus the same $62,200 starting price as both the original X3 and Audi’s entry-level Q5.

For $6620 more than the equivalent version within BMW’s all-new compact SUV range, the similarly engined X1 xDrive20d ($55,580), the entry-level X3 comes with a more powerful 135kW/380Nm 2.0-litre four-cylinder turbo-diesel engine that also outperforms the base Q5 2.0 TDI’s 125kW/350Nm diesel engine.

As such, the cheapest iteration of BMW’s bigger and more sophisticated X3 sprints to 100km/h in a claimed 8.5 seconds on its way to a 210km/h top speed, while the most affordable Q5 does it in 9.9 and has a 200km/h top speed.

Fitted as standard – like all new X3s – with ZF’s latest eight-speed automatic transmission, the X3 20d is also more fuel efficient than its closest Q5 rival, consuming just 5.6 litres of diesel for every 100km and emitting just 149 grams of CO2 per kilometre while the Audi returns 6.8L/100km and 179g/km.

Hence, the revised 2.0-litre common-rail turbo-diesel is four per cent more powerful than before, while delivering nine per cent more peak torque, sprinting to 100km/h seven-tenths of a second sooner and being 16 per cent more economical.

Due to arrive mid-year, the flagship version of BMW’s all-new mid-size AWD wagon delivers even more value, with the X3 xDrive30d price cut by $2500 to $74,900 despite a claimed $10,000 increase in value, making it a full $17,200 less expensive than the X5 range-opener, the similarly engined X5 xDrive30d ($92,100).

More importantly, it also undercuts Audi’s top-shelf Q5 3.0 TDI by $600 and while the most expensive X3’s six-cylinder inline turbo-diesel delivers a beefy 190kW/560Nm, returns 6.0L/100km and 159g/km and sprints to 100km/h in 6.2 seconds, its closest German rival produces 176kW/500Nm, returns 7.5L/100km and 199g/km and hits 100km/h in 6.5 seconds.

According to BMW, that makes the X3 30d 19 per cent more powerful than its E83-series forebear, as well as 11 per cent torquier, 1.5 seconds quicker to 100km/h and 22 per cent more fuel efficient.

The new mid-range 190kW/310Nm 3.0-litre petrol X3 xDrive28i replaces both the 2.5 and 3.0-litre petrol six-cylinder-powered models of the former range and is also priced between the two at $71,900.

BMW says that compared to the outgoing X3 25i, the 28i – so called because its outputs are down 10kW and 5Nm on the former X3 30i – is 19 per cent more powerful and a whole two seconds quicker to 100km/h, while being eight per cent more economical.

BMW Australia will not import the 225kW/400Nm turbo-petrol xDrive35i variant that tops the new X3 overseas and sprints to 100km/h in just 5.7 seconds, for fear of substituting sales of its stalwart X5.

Aiding the efficiency gains for two of the three auto-only Australian models – but not the petrol-powered xDrive28i – is BMW’s first application of a fuel-saving idle-stop system in an automatic vehicle, although all models come with brake energy regeneration technology, which prevents battery charging unless coasting or braking, and on-demand ancillary functions like air-conditioning.

Also standard across the range is a reversing camera, hi-res 6.5-inch colour monitor, BMW’s latest iDrive driver interface, USB audio and Bluetooth connectivity, keyless starting and electric power steering, while the base 20d diesel sits on 17-inch alloy wheels with low-rolling-resistance tyres as standard.

The X3 20d is also differentiated by black (rather than matt-alloy as on the 28i and 30d, both of which score 18-inch alloy wheels) bars in its trademark BMW kidney grille, while all X3s now gain alloy – instead of matt-black – roof rails.

However, the entry-level X3 now comes with ‘Sensatec’ seat trim, rather than the full leather interior of the outgoing base X3 and both upstream variants, which also add power seat adjustment, while the range-topping X3 30d adds an ‘X Line’ chrome and aluminium exterior highlight package and an electric tailgate

Apart from growing the new X3 in all directions and blessing it with fresh powertrains, BMW has addressed criticism of the original model’s interior quality and fitted a raft of cutting-edge technology options including a segment-first head-up information display, ‘Comfort Access’ keyless entry, active cruise control, internet access via mobile phone and the dashboard screen, and ‘Top View’ bird’s-eye parking camera system, which costs $500 extra.

LED ‘corona’ headlight rings come for free with optional Xenon headlights and there is also a host of optional ‘lifestyle’ accessories – not to mention the factory-fitted M Sport Package that comprises an M-badged bodykit, wheels, seats and steering wheel for $4800 (20d), $4100 (28i) or $3000 (30d).

The new X3’s wheelbase is just 15mm longer than before at 2810mm but has 92mm-wider wheel tracks and a body that is 10mm higher, 280mm wider and a whole 830mm longer than before at 4650mm, making it almost as big as the first-generation X5.

Slotting between them in size, the X3 is 20mm longer, 80mm wider and 110mm higher than the X1, as well as 20mm shorter, 5mm narrower and 120mm lower than the current X5.

Based on a stretched version of the outgoing model’s E46 3 Series-based platform, its 1725kg base unladen weight is 25kg lighter than before, thanks to the use of aluminium door and bonnet panels.

BMW claims increases in useable interior space including 90mm more rear shoulder room and an extra 22mm of rear legroom, while cargo room expands by 70 litres to a segment-best minimum of 550 litres, which expands to another benchmark-setting 1600 litres with the new 40/20/40-split rear seats folded.

The previous X3’s multi-link suspension has been switched for a double-joint spring-strut set-up at the front and a five-link rear axle, while Dynamic Damper Control electro-hydraulic shock absorbers are fitted for the first time on an X model, controlled via centre console buttons for Normal, Sport and Sport+ modes that also alter throttle actuation, power steering assistance and transmission shift points.

Like the X5 – but unlike the rear and all-wheel drive X1 range – all X3s come with a constant all-wheel drive system with a default 40/60 per cent front/rear torque split and the ability to transfer almost 100 per cent of drive to either axle. Hill descent control is standard, while ground clearance increases from 201 to 212mm and maximum wading depth remains unchanged at 500mm.

Towing capacity for all models increases from 1580kg to a respectable 2000kg, and all models employ run-flat tyres instead of offering a spare wheel/tyre.

In terms of styling, X3 MkII comes with a redesigned asymmetric dashboard above a centre console that is angled towards the driver. Externally, although it is easy to mistake for its ungainly forebear from the front, the new X3’s longer and wider proportions – punctuated by rounder, more dramatic body surfacing headlined by a bold body-side crease – make it look far more at home on the road, where almost all X3s will be driven exclusively.

New BMW Group Australia managing director Phil Horton said the new X3 was a quantum leap over its predecessor, which he admits had a “chequered history” in many markets and attracted more than 610,000 global sales since 2003, including more than 7400 in Australia.



“The previous X3 seems to have had its own successful niche (in Australia) with arguably not the strongest model we’ve ever produced and I think the new car has grown up a lot compared to the old car – and I don’t mean just in size,” he told GoAuto at this week’s launch of the 2011 X3.



“The quality of the car all around – particularly the interior – is right up to the current BMW standard and the driveability and driving dynamics is a benchmark compared to anything in its class. It’s got a lot of the technology that the previous X3 never really benefited from – it seemed to come too early for this whole raft of technology that has emerged over the last five years or so.”

Mr Horton made it clear the Q5 will be BMW’s primary target for the fresh X3, which is expected to attract up to 150 customers a month for a 2011 maximum of 1500 sales – albeit some of them defecting from the larger X5 – but stopped short of predicting it could out-sell the Q5 this year.

Last year the Q5 averaged 195 sales per month, while the X5 remained number one with 260/month, but after two months this year the X5 is more than 100 sales behind the Q5 and just 21 sales ahead of Audi’s Q7, with the X1 some 62 sales further back in fourth.



“The Q5 is its most logical direct competitor,” he said. “It’s quite clear for us that in terms of the competitive segment … we’re very focused on Q5, which has been a big success for Audi. We through product lifecycles have relinquished a lot of share and a lot of volume to that car and there’s no doubt that that is the car that we’re focused on primarily in terms of grabbing that share back.



“Of course, they have no direct competitor for the X1 (yet), but given they’ve basically got a two-and-a-half-month head start of us (in terms of 2011 sales) will we overhaul them given they’ve been very strong this year? I don’t know. But certainly that’s my objective,” said Mr Horton, adding that the X5 was more likely than the X1 to suffer BMW sales cannibalism at the hands of the X3.



“I don’t think we’ll draw much from X1 and there will be some substitution from X5 inevitably because the car’s a bit more grown up. But I think there’s a clear distinction in most BMW customers’ minds about what an X5 is and stands for, so I’m not sure we’ll lose than many X5s (sales) to X3.”