CITROEN has a lot riding on its first direct rival for BMW’s fashionable Mini, the DS3 premium small-car, which is now on sale in Australia priced from $32,990 plus on-road costs.

Designed to take the fringe-dwelling French brand more upmarket, the first member of a classier new model range to revive Citroen’s hallowed DS nameplate arrives just in time to arrest a worrying 8.3 per cent sale slides for Citroen in Australia this year.

The new DS3 range arrives in the same month that Citroen’s Australian importer discontinued both the existing C3 line-up and the top-shelf C4 variant, and slashed $6000 from the price of its C4 Picasso people-mover to spur sales.

Citroen’s local model rationalisation leaves the Peugeot sister brand with just one Picasso variant, priced at $39,990 drive-away, the run-out C4 hatch range, the volume-selling C5 sedan and wagon range, the flagship $118,500 C6 HDi V6 sedan and two commercials in the Berlingo and Dispatch.

Fortunately for Citroen, the small but stylish three-door hatchback represents the first in a wave of new models from the double-chevron brand, including the redesigned five-door C3 light-hatch in December, the redesigned C4 five-door small-hatch next year and its high-riding premium twin, the DS4, which will emerge in final production trim at next month’s Paris motor show.

Further afield in 2012, a new C5 mid-sizer will spawn a more exclusive DS5 derivative, which will potentially be followed by DS-badged production versions of the Metropolis limousine and Survolt plug-in sportscar concepts.

For now, however, just two versions of the DS3 are on offer in Australia, with supply limited to 35 cars per month.

The entry-level DStyle will line up directly with Mini’s cheapest Cooper hatch and Alfa Romeo’s range-opening MiTo, which are priced from $31,100 and $29,990 respectively in manual gearbox guise.

For $32,990, the base DS3 DStyle offers the same 88kW peak power output as the turbocharged 1.4-litre MiTo and the Mini, which runs the same 88kW/160Nm 1.6-litre petrol four-cylinder engine, but comes exclusively with a four-speed automatic transmission as standard.

The flagship DSport model, priced at $35,990, tops the DS3 range for the time being, powered by a 115kW/240Nm version of the turbocharged 1.6-litre engine from the Mini Cooper S (which sells from $39,990), matched only with a six-speed manual gearbox.

Citroen is yet to confirm the local release of diesel versions of the DS3 – the first model to wear a DS badge in 35 years.

It has ruled out a local release for the limited-edition 149kW DS3 Racing hot-hatch, which in Europe takes aim at the near-$50,000 Mini JCW and will be most closely related to the replacement for the French brand’s dominant World Rally Championship contender in 2011.

However, at the other end of the scale, Citroen has received Australian certification for a cheaper 70kW 1.4-litre DS3 variant, mated solely with a five-speed manual transmission, should the need arise.

For now, the most affordable DStyle trim level is focussed on style and comfort, while the turbocharged DSport is aimed at more sporting drivers – despite the fact it comes standard with a new ‘Gear Efficiency Indicator’ designed to encourage fuel-efficient driving.

Standard equipment for both five-star Euro NCAP-rated DS3 models will include twin front, front-side and side curtain airbags, electronic stability control, ABS brakes with EBD and EBA, front/rear fog lights, air-conditioning, cruise control with speed-limiter, power windows and mirrors, and remote central locking.

The naturally aspirated DS3 DStyle rides on 16x6.0-inch ‘Ashera diamond-tipped’ alloy wheels with 195/55 tyres, while the turbocharged DS3 DSport variant comes with 17x7.0-inch ‘Bellone’ alloys with 205/45 R17 tyres.

The top-line DSport additionally gets a chromed grille, tailgate, door mirrors, foglights and side rubbing strips, a rear spoiler, interior mood lighting, automatic digital air-conditioning, a front armrest, dual exhaust outlets and drilled aluminium pedals.

In line with the premium positioning of the DS line, which takes its name from the iconic French model sold between 1955 and 1975, the DS3 will come with a range of customisation options – albeit fewer than what is available in Europe.

As with the Mini, customers can specify exterior and interior colour combinations, materials, finishes, trims and equipment, with the DS3 key fob matching the body or roof colour of their vehicle.

Indicative of its target audience is the DS3’s inclusion of an auxiliary audio socket, although USB and Bluetooth connectivity and a new eight-speaker sound system remain optional, as are rear parking sensors.

Based on the next-generation C3, the five-seater DS3 rides on a 2464mm wheelbase and measures 3948mm long, 1715mm wide and 1483mm high, making it larger than both the Mini hatch and (Clubman) wagon, and giving it more interior space than both Minis and the MiTo.

The application of leather and chrome interior touches are designed to make the DS3 cabin as elegant as the Mini’s, while an already class-leading cargo volume of 285 to 980 litres is made more flexible by a 60/40-split folding rear seatback.

Draped in a totally different three-door bodyshell to the C3, the DS3 features a distinctive ‘Shark Fin’ B-pillar, a Mini-style ‘floating’ roof and signature LED strips down either side of the front bumper.

Fitted with a small (363mm) diameter leather-clad sports steering wheel with remote audio controls, the base DS3’s variable electric power steering system has a turning circle of just 10.2 metres, while the DSport’s is still tight at 10.4 metres.

Both DS3 engines were co-developed with BMW.

The DStyle’s all-alloy 1598cc 16-valve DOHC ‘VTi 120’ (which stands for variable valve lift and timing injection) develops 88kW (120hp) of power at 6000rpm and 160Nm of torque at 4250rpm, with 90 per cent of peak torque claimed to be on hand between 2500 and 5750rpm.

With the auto transmission, the base DS3 returns average fuel consumption of 7.0L/100km and CO2 emissions of 160g/km, while also delivering a 190km/h top speed and a claimed 0-100km/h time of 10.9 seconds.

The DS3 DSport’s ‘THP 155’ (for turbo high pressure) direct-injection twin-scroll turbo engine produces 115kW (155hp) at the same 6000rpm and 240Nm between 1400 and 4000rpm, with 156Nm available from just 1000 rpm.

Mated to a new MCM six-speed gearbox, it sprints to 100km/h in 7.3 seconds on its way to a top speed of 214km/h.

As well as being faster, the DS3 DSport also has better environmental credentials, with a combined-cycle fuel consumption figure of 6.7L/100 km and CO2 emissions of 155g/km.

For the record, both the 1075kg DStyle and 1165kg DSport have a braked towing capacity of 1150kg (570kg unbraked).