THE new A3 is a big deal for Audi Australia: an ambitious company with designs on being the country’s number-one premium brand.

Audi reckons it started the whole luxury small-car segment in 1996, and has tasked this new, third-generation model with putting punky upstarts like the A-Class and 1 Series in their place.

To help, it has launched the A3 with one of its largest ever marketing campaigns, and will attempt to lure hip young professionals and empty nesters alike.

We think its chances are good, because while the A3 lacks the design spunk of the Benz, it has a class-leading interior, better dynamics than the old one and badge cache to match the best.

The battle at the small-premium end of town is heating up, and Audi has shown it has the tools to stay in the game (or kitchen, if you prefer cliched aphorisms).

Click on Our Opinion for the full review...