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The hot Audis of today can be divided into two camps: those that are developed by Quattro GmbH and those that aren't. The "RS" models, such as the new RS4, are engineered by Quattro, Audi's enthusiast-led in-house skunkworks operation set up to rival BMW's M-Power and Mercedes' AMG. The "S" models, such as the S4 and the 2007 Audi S3, are developed alongside the rest of the mainstream range. They are, by definition, less extreme than the RS cars and are, in theory at least, easier to live with.

The new S3 is therefore designed to be focused, but not that focused. It costs a hefty £26,995 (about $50,200) in the U.K. and sits above the A3 3.2 V6 in the range. The S3 gives away two cylinders to its sibling but gains a turbo and 15 horsepower. Quattro all-wheel drive is standard, but Audi's excellent DSG (now called S-tronic) transmission isn't even available as an option.

A sharp suit
The standard A3 has been given a subtle but effective makeover. A new front apron helps frame Audi's trapezoidal grille and complements the new side skirts. Aluminum-look wing mirrors are a signature feature of S models and the rear is distinguished by a roof spoiler, oval chrome tailpipes and a slightly apologetic-looking diffuser. The whole car also sits 25mm lower to the ground than the standard A3, which helps the new 18-inch alloys fill the wheel arches.

It's a neat, measured design that is tuned to appeal to Audi's traditional fan base. But it's a shame that the S3 package won't be offered as a more visually appealing five-door Sportback. Audi is adamant that it has no plans for such a car, which also explains its decision not to bring the S3 to the U.S.

Familiar Audi interior
Nobody does interiors quite like Audi. The choice of materials, style and build quality are all significantly better than both the rival (Europe-only) BMW 1 Series and Volkswagen Golf R32. The beautifully crafted fascia, familiar to drivers of the U.S. A3 Sportback, has been given a subtle S makeover. Sport seats are standard and "S3" emblems are featured on everything from the steering wheel to the door trim. The pedals and gearshift knob are crafted from aluminum.

This car feels like a quality item, which is just as well, given its lofty price tag.

Turbo power
Audi's marketing boffins reckon that S3 owners prefer the punch of a four-cylinder turbo to the creamy linearity of a V6. To satisfy their whims, Audi has revised its familiar 1984cc direct-injection turbo. The cylinder head and block have been strengthened and the pistons have been modified to cope with the increase in power delivered by a modified intercooler and a new turbocharger. The latter delivers a peak boost of 1.2 bar.

This is the most powerful version of this engine ever produced. It delivers 262 horsepower at 6000 rpm and 258 pound-feet of torque all the way from 2500 to 5000 rpm. This compares favorably with the BMW 130i (261 hp and 232 lb-ft).

The S3 is rapid — Audi claims 0-62 mph in 5.7 seconds and a top speed limited to 155 mph — and its cause is helped by the traction of Quattro. The BMW scurries to 60 mph in 6.1 seconds, but in comparison to the Bimmer's straight-6 or even Audi's own V6, the four-pot engine sounds disappointingly coarse. Enthusiasts are also denied the quick-fire response of a normally aspirated unit. The S3 is proof that turbo lag has not been dispatched to the dustbin of history.

Uprated chassis
In theory at least, the choice of a four-cylinder should benefit the S3's handling by reducing the mass over the front wheels. Audi's engineers have also retuned the springs and dampers, introduced aluminum wishbones to reduce the unsprung mass, reduced the gearshift travel, and retuned the electromechanical steering.

These revisions have produced a car that is quick, capable and easy to drive. There's no shortage of grip from the combination of 225/40 rubber and all-wheel drive, and when the limit is reached, the S3 tends toward safe, predictable understeer. The six-speed manual gearbox is quick and positive, and the brakes — which feature 17-inch discs — offer plenty of stopping power.

But there is little in the 2007 Audi S3's makeup that will excite the committed enthusiast. The steering fails to communicate in the manner of a good European Ford or BMW helm, and drivers who enjoy using the throttle to adjust their car's trajectory will find the S3 disappointingly unresponsive. The rear-wheel-drive 130i may be a more challenging car to drive hard, but it's also much more tactile and rewarding. The Audi's ride quality is also worryingly firm on all but the smoothest surface.

Final thoughts
Audi has shown with the brilliant RS4 that it's capable of taking the fight to BMW. But the S3, like the S4, is something of a disappointment. European buyers will find that it's scarcely any quicker or more exciting than a Ford Focus ST, which costs almost £10,000 (about $18,600) less. Anyone looking to spend premium money will find themselves better served by the BMW 130i or even an Audi TT, which is slower and less practical, but more fun to drive.

This is one quick Audi that the U.S. can happily do without.