(QQ, Fall 2004) — Audi’s suave new five-door hatchback, the A3 Sportback, felt right at home among the bronzed flesh, twin-mast yachts and chic shops of Monte Carlo. And it felt equally comfortable challenging the rugged mountains of les Alpes-Maritimes, which rise steeply above the Cote d’Azur, the Mediterranean’s fabled “blue coast.”

Les Alpes tortuous terrain provides some of the best driving roads in the world and was a perfect venue for a revealing first encounter with Audi’s new five-door hatchback. The roads twist over steep ridges dotted with olive trees in a pointillist canvas of green and gray, and snake between rocky crags capped by tiny villages, their whitewashed walls like cubes of light in the soft southern sun. It’s little wonder that Picasso, Chagall and Miró, among many other artists, derived inspiration from their time spent in this wonderful corner of Europe.

We didn’t linger to view the arts and crafts of St. Paul de Vence or visit the parfumeries of Grasse, but if you’re driving a car like Audi’s new A3 Sportback, skip those heavily visited towns and head for the Route Napoleon. So named because it traces the path taken from Nice to Grenoble by Bonaparte after his escape from Elba in 1815; la Route is a driver’s delight. Seemingly carved from old goat paths, it offers spectacular views, frightening drop-offs, weirdly angled corners, sluggish locals in old Citroëns and every opportunity to discover the dynamic delights of Audi’s new A3.

This is the second generation of the A3 but the first to come to America. As shown by MINI that a premium compact can appeal to the American buyer, Audi is bringing one of its two new A3 models to the U.S. and Canada, but, sadly, not before next May. Lucky European buyers can now choose between three-door and five-door configurations, but we’ll get only the five-door model, and it will be called the Sportback to differentiate it from its sibling. And whereas several engine options are available in Europe, the Sportback that comes here will, at first, be powered only by a newly developed turbocharged 2.0-liter four, and it will drive just the front wheels. Quattro fans will have to wait for about nine more months before the all-wheel-drive A3 arrives, but a bonus for their patience will be found under the hood—VAG’s much admired 3.2-liter V6.

Cost of the A3 Sportback will be shy of $25,000 ($33,000 Canadian), but fully optioned cars should climb to somewhere near $32,000. Standard equipment is typically Audi, generous and luxurious (including an S Line exterior package that really spiffs the car out), but the exciting story is under the hood. The new intercooled 2.0-liter turbo four is everything a small displacement performance engine should be, a deserving successor to the vaunted 1.8T engine. Officially called the 2.0T FSI, its 200 bhp is underscored by a tire-twisting 280 Nm of torque that delivers unwavering muscle across a wide sweep of tach needle from 1800- to 5000 rpm, making the 2.0T FSI every bit as responsive as engines with far more displacement.

This is also the first production car engine to combine turbocharging with direct injection (FSI), the system that was used to such good effect in the Audi R8 Le Mans race cars. Here’s a quick primer in FSI technology. In contrast to conventional intake systems, where fuel is injected through an intake manifold, FSI delivers the fuel directly into the combustion chamber. The injector, located on the intake side in the cylinder head, is served by a high-pressure pump driven by the camshaft and a pressure reservoir shared by all cylinders: thus, the common-rail system. Injection times are controlled to within .001 second at injection pressures of up to 110 bar. To compare, a manifold injection system operates at a maximum of four- bar, and the result is more power with greater efficiency and an engine that climbs up smoothly yet quickly through its powerband as only the most rigorously engineered machines can. Turbo lag is nonexistent. Just push your right foot down and let the 2.0T do the rest.

Audi says the A3 Sportback sprints from 0 to 60 mph in 7.0 sec., a modest figure by today’s standards, but the raw number doesn’t begin to do justice to the car’s throttle response. Torque is ever ready, and the engine is quite happy to reach 6000 rpm over and over again. It’s a wonderful match for the light-stepping chassis, with the power and handling creating a dance team that has the driver tapping happily along on his three-pedal instrument.

The turbo FSI is based on a naturally aspirated 2.0 FSI four with 150 bhp, one of the seven engines offered in the A3 line-up in Europe (1.9L TDI, 2.0L TDI, 1.6L, 1.6L FSI, 2.0L FSI, 2.0L TFSI, 3.2L). The 2.0-liter engines share certain dimensions, such as the 88mm cylinder spacing, and have identical cylinder heads and crankshaft drives, but many other components were modified to handle the higher operating pressures and dynamic loads imposed by the turbo.

The block is made from gray cast iron, a material that exhibits both high pressure resistance and excellent acoustic properties. A mass balance system—two balance shafts rotate at double the speed of the crankshaft to compensate for the engine's inertial forces—further improves the acoustics. A triangular-layout chain drives the oil pump as well as the balance shafts. An aggressive sounding, specially tuned exhaust system provides a pleasing counterpoint to the engine’s smoothness.

A high-tech plastic intake manifold also integrates the charge movement flaps. Continually adjusted by a pilot motor, the flaps ensure optimum movement of airflow, or tumble, based on engine-speed and load conditions. The four-valve cylinder head with low-friction roller cam follower drive has a modified inlet duct geometry that produces even higher tumble values than the naturally-aspirated FSI engine, ensuring greater knock resistance and, hence, efficiency.

This allows the turbo engine to run with a compression ratio of 10.5:1, a figure usually reached only by the latest naturally aspirated engines. This combines with the advantages of gas direct injection to greatly increase thermodynamic efficiencies, particularly when compared with both manifold injection and conventional turbo engines. For instance, the 2.0’s swept volume is only 10% more than the 1.8T’s, but the torque has increased by 20% to 280 Nm, which gives the 2.0T the flexibility of a master yogi. Consider: In fourth gear the midrange spurt from 60 to 120 km/h takes just 5.4 seconds compared to the 1.8T’s time of 6.8 seconds. And take-off power was also improved: Once the throttle is opened, the 2.0T FSI delivers about 15% more engine torque than the 1.8T and max torque is reached much more rapidly—in just half the time. Audi says the car will reach a top speed of 236 km/h, but ultimate velocity is not what the A3 is all about. It’s more about the fun of getting there.

The transmission choices underscore Audi's industry-leading technology in transferring engine torque into rolling power. The 2.0 will come with two gearboxes: a new, super-slick six-speed manual that clicks from gear to gear with a precision unequalled in any previous Audi transmission, and Audi's super-trick DSG (Direct Shift Gearbox), which takes clutch-pedal-free gear changes into an entirely new realm of amazing.

The flexibility of the 2.0T and the ease of gear selection was appreciated on the wriggling roads of les Alpes, where braking, steering and choosing the right gear occur in rapid succession. A few straight stretches allowed some forays into fourth gear, but in no gear did the engine complain or rasp in harsh annoyance at our aggressive driving.

The swiftness of choosing the correct gear with either gearbox is more than matched by the car’s quickness on its feet. Surefooted agility, even with only the two front wheels driving the car, comes easily to the Sportback, thanks in large measure to a new four-link rear suspension. Not only did we rip around the winding roads above France’s Cote d’Azur with the confidence of a Lance Armstrong conquering a hillclimb, we enjoyed a luxuriously smooth ride driving back to the Cote d’Azur on the autoroute.

Compactness, low weight and superior handling are all expected benefits of such a complex suspension, but the cost and effort of adding it to a market segment unused to such superior technology seems well worth it. The multiple links provide a functional separation between the longitudinal and transverse forces, resulting in exceptional lateral rigidity for better handling (and a safer car) and relatively soft lengthwise control to improve ride comfort. Audi’s suspensions once had trouble reconciling a proper compromise between handling and ride comfort; no more.

The multiple links are formed by a wheel carrier with a wheel bearing unit, two lower wishbones (spring link and tie rod), one upper wishbone and a trailing arm. The three wishbones are connected to the body by a subframe of extra-strong steel tubes and plates, which is bolted to the body to form a complete unit—to save weight while also strengthening the rear of the chassis. (When the quattro appears, the rear axle subframe also will serve to accommodate the final drive and will be made of aluminum for further weight savings.)

The springs and twin-tube gas-filled shock absorbers are mounted separately, the shock outside the spring, allowing the shocks to be fitted close to the wheels for additional cargo room. An anti-roll bar, mounted on extra-firm rubber/metal mounts, is standard.

The front suspension is a MacPherson-type design with triangular lower wishbones. The subframe is bolted to the forward structure, and the anti-roll bar is mounted directly on the spring strut for quicker, more dynamic responses to road conditions. This also allows a smaller anti-roll bar, reducing front suspension weight by 1.6 kg. The front wishbone mount is extra firm for enhanced lateral control, while the rear wishbone mount, in contrast, was engineered with non-linear characteristics, assuring good ride comfort under minor loads and controlled self-steering dynamics as forces increase.

The A3’s premium-level technology even extends into the steering box, which is now electromagnetically adjusted in response to steering wheel angle and vehicle speed. Servotronic® steering is found in many cars, but the feel comes down to the software that determines the levels of assistance, and the A3 felt a bit overdampened around the on-center point. The steering was hardly imprecise during our admittedly short period of familiarization, but it was the only area we felt needed some fine-tuning.

At one juncture of our jaunt, we weaved the A3 through the tight streets of Grasse, replaying the many cinematic car chases filmed in the area. The four-wheel disc brake system, peeking through the standard 16-in. alloys, offered no surprises, a very good thing with brakes. Later in the day, over the steep and winding contours of the Col Turini, they showed no sign of fade, and the ABS was nicely tuned on the aggressive side, allowing a good measure of late braking.

This latest-generation ABS features, for the first time in an Audi, a dual-rate servo, which amplifies brake force when it senses the driver’s right-footed scream for emergency stopping power. The newest available Electronic Stabilization Program guides the inept through the vagaries of life’s roads with astonishing computer power. Its overall function incorporates the ABS, EBD (electronic brake-force distribution), ASR (traction control system), MSR (engine drag torque control system), EDL (electronic differential lock), hydraulic brake assist and the ESBS (extended stability braking system).

All that acronymic mumbo-jumbo translates into, for its class and price, a truly unique driving experience.

But, is that enough? Audi didn’t think it was, and so it committed the same energy to the entirety of the A3 as it does to its big luxury cars. From panel fitment to lustrous paint, from immaculate stitching throughout the inviting interior to the newly developed Open Sky dual sunroof system, the A3 exudes exquisite sensibilities in design and use of materials. In other words, Audi business as usual.

Some of the A3’s staff of designers—including chief designer Garry Telaak and interior designer Helyn Latham—talked with us poolside at the Monte Carlo Beach Club, and though the location was an obvious marketing department fantasy fest, the setting was not devoid of a serious message. Within the whirlwind of hype was a substantial statement of force: Audi has muscle and the strength to flex it in daring new directions.

The first generation of A3, available only in a three-door set-up, was a success in Europe, and there’s every indication the five-door Sportback will only increase the car’s sales momentum—over there. Americans, though, have had no great love for hatchbacks, primarily because they’ve been associated with inexpensive—read: cheap—small cars. That negative onus is changing thanks to the MINI and cars from the Asian and domestic carmakers, but it’s still a gamble that a compact wagon/SUV-type car is appealing to a country that equates usability with size.

Telaak, for one, is convinced the Sportback has the coupe-like looks and premium-level fit and finish to turn the tide. Fuel prices in the U.S. are certainly working in favor of cars like the A3, which offer equal measures of style and utility, and the flat sales of full-size SUVs indicates the market is moving elsewhere. Is it moving in the A3’s direction?