THE car industry is a funny thing.

Mercedes-Benz has designed its new fourth-generation C-class to be more dynamic to drive, with palpably higher quality, improved comfort and greater safety through technology.

And after a day behind the wheel, we’re not arguing, although cynics may see this as Mercedes’ attempt to emulate a BMW 3 Series.

Meanwhile, back in 2005, BMW tried to make its 3 Series more refined as well as dynamic, with greater levels of comfort and luxury... this sounds a little like a move towards Mercedes territory to us.

And then there’s Audi and Lexus. The former seems hell-bent on being the new BMW with the way its cars drive, while the latter has openly admitted that the IS – from its transition from first to second generation – moved its focus from 3 Series to C-class…

It’s enough to do your head in.

This situation reminds us of that 1990s Blur anthem ‘Girls and Boys’, with its “Girls who are boys/Who like boys to be girls/Who do boys like they're girls/Who do girls like they're boys/Always should be someone you really love” lyrics.

You could easily swap ‘Girls and Boys’ with ‘Mercs’ and ‘Beemers’.

The fact is, the W204 C-class is a remarkably competent all-rounder, with styling that is unmistakably Mercedes without it being too bold – with the exception of the Avantgarde model’s big brash three-pointed star grille, which does give the series a racier and more youthful edge than before.

Although the footprint is only a little wider than before, interior dimensions rise thanks to a larger body that sits on a longer wheelbase.

The upshot here is as much space as you should expect from a modern compact rear-wheel drive sedan. Front legroom is especially generous, with the seat’s runners reaching right back to the rear seat. Four average sized adults should find their pews comfy and supportive.

Good news for more traditional Mercedes-Benz buyers is a welcome upgrade in the design and execution of the dashboard and cabin architecture.

Special mention goes to the smart new instrument dials with the speedometer’s ‘floating’ needle, as well as the utterly logical and easy to use sat-nav, audio and heater/air-con controls.

The 475-litre boot is not too bad either, and is not too far short of the larger E-class’ luggage space.

Stupid and antiquated foot-operate park-brake (BMW would never have the driver stoop literally and metaphorically down to this level) and ugly steering wheel aside, the helm is a much better place for keener drivers to be sited before, thanks to a complete rethink of the steering and suspension geometry.

Even before the first corner is completed, it is clear that the C-class’ turn-in is quicker than ever, with greater smoothness and flow accompanying the way this car steers and handles.

Yet Mercedes has resisted going as far as BMW, because there is neither as much weight nor as much feel from the wheel as a 3 Series. For some drivers, this is good news, because it means that the C-class is lighter and easier to manoeuvre than its Munich rival for others, it just means that the BMW is more communicative and involving.

There isn’t terribly much in it though, and the newfound dynamic aptitude catapults the C-class to second place for all-out driver enjoyment, behind you-know-what.

One area that the BMW seems roundly beaten by the C-class is in its ride quality. Here, the trick dampers that – along with the much stiffer and stronger body structure – allow for shaper cornering automatically switch to a softer setting when greater absorption qualities are required.

Coupled to Mercedes’ pioneering multi-link rear suspension set-up and cornucopia of electronic driving aids led by ESP stability control, there is little doubt that the C-class ably balances high levels of dynamic body control and driving enjoyment with occupant comfort.

But you know what? This car’s newfound dynamism has left the largely carryover petrol engine range languishing a little.

The 135kW/250Nm 1.8-litre supercharged four-cylinder C200K may have found an extra 25kW and 10Nm, and the marginal weight increase of 15kg to 1490kg is highly commendable considering how much stronger, larger and better equipped the W204 is over the old sedan.

However, the base baby Benz sedan simply does not have the urge or oomph that this sharper and stiffer chassis deserves. Plant the foot and the engine seems quite harsh, as well as dispirited, until about highway cruising speed, when it then settles into a happy rhythm.

Having five speeds when most others now have six is also a little off the pace for such a technologically minded company, although most punters will not care since the gearbox works perfectly well and continues with the elegant left/right Tiptronic-style sequential manual gearshift.

One particular C200K we drove suffered from a lot of wind and road noise, but the others were fine.

Meanwhile, the 170kW/300Nm 3.0-litre V6 C280 has the required smoothness and finesse, but not the low-down punch that you might demand from a big-engined compact sedan. And this is despite the presence of the slick 7GTronic seven-speed automatic.

Like the C200K, once you are up into the 100km/h-plus range the engine seems much more responsive – no doubt helped by the excellent 0.27Cd aerodynamic factor – but you would never call this sweet-sounding powerplant exciting.

In Europe Mercedes is also introducing the W204 in more powerful V6 petrol and diesel guises, as well as all-wheel drive.

The latter’s left-hand drive-only deal is a crying shame, but the 200kW/350Nm 3.5-litre V6 and – in particular – the 165kW/510Nm 3.0-litre turbo-diesel V6 that returns 7.6L/100km (compared to the V6’s 10L/100km) would certainly catapult the C-class into greatness.

Start lobbying your Mercedes dealer now. Imagine how hard that V6 diesel would hammer.

On the subject of diesels, we were unable to sample the 125kW/400Nm 2.2-litre four-cylinder C220 CDI turbo-diesel due to a glitch with our test car’s five-speed automatic drivetrain, but a drive report will follow soon.

We came away from driving the new C-class feeling confident that Mercedes has progressed in the area of driver enjoyment while rediscovering how to make its BMW 3 Series rival a better place to sit inside.

Its value pricing that sees the old C200K costing $7500 more than new C200K might upset existing owners who rely on Mercedes to help maintain strong resale values, but there is no doubt that you simply cannot go wrong settling for the Benz if you want a great all-rounder.

But we do find the C200K’s performance disappointing when BMW and Lexus offer livelier and more refined engines tied to six-speed automatic transmissions, while the C280’s lack of a strong performance character comes as a bit of a surprise.

Still, it would be remiss of potential buyers not to sample the more-BMW-like C-class. It still is as much of a Mercedes as ever.