In Detroit, luxury has traditionally been associated with large cars. In contrast, BMW's and Audi's compacts, the 3-Series and Fox/80/90/A4, have been their top sellers since at least the 1970s. With each redesign these compacts have grown is size, content, and price. As a result, they no longer serve the markets they once did. Seeking to fill this gap, both brands will be introducing smaller, more affordable products: the BMW 1-Series and the Audi A3. In a similar move, Volvo and Saab not long ago introduced more affordable products, the S40/V50 and 9-2X, respectively.

These new products have led many auto journalists to wonder how low can a premium brand go without losing its premium image. Will a cheaper product cheapen the image of the entire brand? Can it possibly be seen as a genuine Audi/BMW/Saab/Volvo?

The Saab and Volvo have met with mixed results. Low sales (prior to $5000+ rebates) indicate that people do not see the 9-2X as a Saab. Rather, they see it as a lightly modified Subaru Impreza, and apparently prefer to buy their Subarus from Subaru. The Volvo, in contrast, seems to be perceived as a true Volvo despite sharing a platform with the Mazda3 and the European-market Ford Focus. Credit a genuine Volvo powertrain and unique sheetmetal and interior that easily fit in with the rest of the line.

Audi's A3 arrived at dealers in late April. In terms of content if falls between the Saab and Volvo, as its platform, powertrains, and basic look are shared with the VW Golf. I took one for a test drive to evaluate whether the A3 makes sense as an Audi or is just a tarted-up higher-priced Golf. I test drove an A4 the same day, so I can also comment on how the A3 compares to the next most junior car in the line. I later drove both cars again on more challenging roads. The first A3 I drove was equipped with nearly every option, including the Sport Package. The second time around the A3 had no options.

Styling

I was unexpectedly drawn to the A3's styling because it bears more than a passing resemblance to the car I currently drive, a Mada Protege5. Only one bodystyle will be offered in the U.S.: a four-door "sportback" that, like my Mazda, falls somewhere between a hatchback and a wagon. This distinguishes it from the slightly less lengthy Golf, which lacks a window aft of the doors and is clearly a hatch. It also distinguishes the A3 from the more conventionally configured A4.

Beyond this difference of configuration the A3 has moderately different styling than the upcoming 2006 Golf. The forms are less complex, especially through the rear quarters. More upscale but less dynamic.

I suppose the A3's straighter lines, most notably a clearly defined shoulder running the length of the cabin, are meant to evoke the range-topping A8. Yet, aside from the large new Audi signature grille--which I personally dislike--the A3 resembles the previous generation of Audis more than the more curvaceous current one. The Golf is fresher.

The A3's standard five-spoke alloys look very good on the car. Sadly, getting either the Sport or Premium Package replaces these with considerably less attractive 16-spoke wheels. Note: the wheel and tire sizes do not change, just the look of the wheel.

Inside the A3, the TT's signature bezel-operated circular air vents, copied by many manufacturers, do the most to distinguish the A3's instrument panel from that in the Golf. Overall the interior is a bit more upscale than that in the VW. A smoother transition from the center console to the center stack gives the Audi's interior a leg up.

Yet overall the interior look and feel are more VW-like than Audi-like. It seems that Audi's penchant for pricey interior materials cannot be afforded at this price point. Not that the interior feels in any way cheap. But VW offers the most well-appointed interiors among the non-luxury brands, leaving the A3 with little room for further improvement within reasonable financial bounds. A nice interior, but if you want the usual Audi wood and chrome you'll have to spring for the pricier (but not much larger) A4.

Accommodations

Despite 12-way power adjustments I could not quite get comfortable in the A4's very firm seats. So imagine my surprise at finding the seats in the first A3 considerably more to my liking. This A3 did have one unfair advantage over the A4s I drove: it was equipped with the Sport Package, and thus with better-bolstered seats. But I also found the non-Sport seats in the second A3 marginally more comfortable than those in the A4, if not as impressive as those in the Sport Package car.

In the Golf (and related Jetta) a small wall rests at the base of the windshield. To the A3's credit, it lacks this aesthetic disaster. You sit a bit higher relative to the dash top than in the A4 or Golf/Jetta, and I tend to prefer the greater forward visibility this provides.

The A3's back seat is very similar to the A4's in both roominess and comfort. Meaning both are marginal for an average-sized adult. In both cars my shins made contact with a hard edge along the bottom of the front seatback. A little padding over that part of the seat frame would help.

One unusual perk for rear-seat passengers: the loaded A3 was fitted with the $1,100 "Open Sky System." Essentially this is a panoramic sunroof where the front glass panel retracts over a fixed rear glass panel. If you don't want so much sun in the car, each panel has a semi-transparent vinyl shade. Among reasonably-priced cars, only the Scion tC offers a similar roof. (Oddly, in that much less expensive car this feature is standard.)

One possible issue with this roof: kids can easily release the shade, but they won't be able to reinstate it. So you'll either have to pull over and put it back in place every time they decide to play with it, only to then complain the sun is hurting their eyes, or let them fuss until they learn not to play with it. Sadly, I'm not just making this up. My children weren't along for this test drive, but I did once take them along when testing a Chevrolet Malibu Maxx equipped with a similar feature.

As a "sportback" the A3 offers about as much cargo capacity as a hatchback. For groceries it'll do fine, but for anything sizable you'll be folding the rear seat.

On the Road

Currently the A3 is offered with only one engine, the latest iteration of VW's four-cylinder turbo. Compared to last year's 1.8-liter, the new engine is a bit larger at 2.0 liters and benefits from direct injection (where fuel is injected at high pressure directly into the cylinders rather than into the intake just behind the valves). Horsepower increases in line with engine size, from 180 to 200.

But the most significant improvement is a considerable reduction in the lag before the turbo's boost kicks in. With the new engine such lag approaches zero; the power curve is very linear in practice as well as on paper. (VW's turbo engines have long had a linear power curve on paper, but this curve assumes full boost across the spectrum. In practice boost lag made the engines' power curves feel far from linear. The same is true of turbo engines from Subaru and especially Volvo.) The main way I could tell the A3's engine was turbocharged was by dipping into the throttle then immediately releasing it. The engine doesn't react as quickly as a non-turbo would to the sudden release of the throttle and overruns your intentions a bit.

I should also note that this new engine felt much more energetic in the A3 than in the A4. A major part of the reason: the A4 had all-wheel-drive, while Audi's signature system is not yet available on the A3. All-wheel-drive adds weight and mechanical drag, and thus decreases the perceived responsiveness of the engine. In its favor, all-wheel-drive permits a much heavier application of the throttle in turns. Nail the A3's throttle in a turn and you'll spin a tire--at least until the traction control kicks in.

The new engine sounds more sophisticated than the old one, but its note is still far from thrilling. So if a sweet engine note is a priority you're more likely to be satisfied by the narrow-angle 3.2-liter V6 that will eventually be available in the A3. In its defense, for a four the 2.0T is very quiet. Especially in the A4 I found it easy to forget to shift into top gear on the freeway.

The transmission is improved over past VW units. Meaning it's about average now, with not much to say for or against it. Audi's innovative DSG transmission is a no-cost option. If you really don't want to deal with a clutch, the DSG is the next best thing to a true manual. FYI: the same powertrain will be offered in the GTI version of the new Golf.

I tested the A4 in part because I'd heard that for 2005.5 it had been equipped with the high-performance S4's steering and suspension bits. It seems that it takes a lot of power to make this chassis entertaining, and so the car still isn't as entertaining along a curvy road as the S4. I found the A3 considerably more to my liking. Most importantly, it feels much more agile than the A4. Less weight and the lack of all-wheel-drive help here, but I suspect that a better suspension and steering design deserves the most credit. The A3's steering provides better feedback and feels less heavy, contributing to the A3's greater eagerness to dance. The A3's steering is still not ideal, but it's not too far off, say, the Mazda3's.

The above applies to the Sport Package A3. Without this package, the A3's steering feels less sharp and the car feels less agile. (The salesperson claimed that the Sport Package does not alter the steering, but it felt different to me.) The A4 without Sport Package falls between the two in character. I strongly recommend the Sport Package in the A3 because without it the car feels overly soft. As discussed above, you get better seats in the bargain.

Notably, even though the first A3 I drove had a stiffer sport suspension while the A4 did not, the A3 rode more smoothly and reacted less noisily to tar strips and the like. In other ways, though, the A4 feels the more upscale car, as it should. The A3 doesn't feel as solid and substantial as the A4, and suffers from a bit more wind and road noise at highway speeds. In this way it is more like a VW than other Audis. Still very good, but not quite luxury.

Audi A3 Price Comparisons and Pricing

The A3, though about $2,000 less than an A4 (after adjusting for features) is pricey for what is essentially is, a sport compact. The price starts under $25,000, but a few options will take it over $30,000, and ticking off all the boxes (including the $900 Bose stereo, xenon headlights, and nav system) should get it to about $34,000. Once the six and all-wheel-drive become available $40,000 might even be within reach. Figure about halfway between a Golf and an A4. A Mazda3 costs about $8,000 less.

Prices change frequently, and differences will vary based on feature level. To quickly generate these and other comparisons with the specific features you want, visit my Web site, www.truedelta.com. (It's the only site that provides true "apples-to-apples" price comparisons.)

TrueDelta's page for the A3:

http://www.truedelta.com/models/A3.php

Last Words

I liked the A3 (when equipped with Sport Package) more than I expected to. High points include the engine, the handling, and the seats. In each area the A3 was better than the pricier A4. However, while the A3's interior is certainly very nice for a sport compact, it isn't quite that of an Audi. Ditto the perceived solidity and "luxury feel" of the car. For example, the Volvo S40 has a much more upscale (if less sporty) ambiance than the A3. The small Swede feels like a scaled-down luxury car. The A3 does not. The end result might fall too close to the upcoming GTI. Some seat time in that car will be telling.

For similar reasons the A3 also falls too close to the Mazda3. The Mazda's interior isn't quite as nice, and it's not quite as quick, but the two cars feel much alike. This says a lot about the Mazda's refinement and the A3's handling, in each case a substantial improvement over the Protege and Mark IV Golf platform, respectively. Given that the Mazda is much less expensive than the Audi, it makes the latter hard to justify. While I'd recommend the A3 over the A4 for a driving enthusiast I'm not sure this enthusiast wouldn't in turn be better off in the Mazda.

So, will the A3 sell well? Will it help the Audi brand, or hurt it? The dealer told me that Audi won't be supplying many of the cars, in part because demand for the A3 is so strong in Europe. So demand shouldn't have much trouble meeting supply. And the Audi brand? The A3 is too similar to the Golf and isn't quite fully an Audi, but it's good enough as a car and enough of an Audi that I don't foresee any harm being done to the brand's image.

A Note on Audi A3 Reliability

I cannot practically cover reliability within the context of this review. However, many people are interested in such information, so I've started collecting my own data. Results, once they are available, will be posted to my site, www.truedelta.com, with updates every three months.

Unlike other sources, TrueDelta will clearly identify what difference it will make if you buy an A3 rather than another vehicle by providing "times in the shop" and "days in the shop" stats (among others). You will be able to specify the number of years, annual miles, and types of repairs to include in Audi A3 reliability comparisons. Audis don't have the greatest rep for reliability. But exactly how much less reliable would an A3 be than, say, an Acura TSX?

Before I can report results, I need data on all cars--not just the A3--from people like you. To encourage participation, those who help provide the data will receive free access to the site's reliability information. Non-participants will have to pay an access fee.

For the details, and to sign up, visit www.truedelta.com.

A link to this website and alphabetized links to my other vehicle reviews can be found on my profile page.

Some of my reviews of related vehicles:
Audi A4 2.0T review
Mazda3 review
VW Jetta review
Volvo S40 review
Amount Paid (US$): 31000
Model and Options: Sport, Climate, and Convenience Packages; Bose; panoramic roof