Audi’s rivals aren’t going to relish this cheaper – and stylish – addition to the executive pack, says Mike Rutherford

The mighty BMW and Mercedes-Benz empires will soon have a major and deeply uncomfortable problem on their hands. The same crisis is also heading in the direction of weaker Jaguar, Volvo and Lexus, who will suffer even more pain. In fact, all manufacturers of what can loosely be described as premium saloon cars are about to find themselves with a dilemma they could do without.

Audi is to blame. The firm from Ingolstadt at best torments and at worst traumatises rival firms. It's the company's imminent A4 replacement that's inflicting all the damage. This is bad news for Audi's competitors, but don't let that worry you. Much more important is the fact that buyers in the market for a classy, £20,000-plus motor car will be ecstatically happy with the arrival of the latest Audi. And so they should be.

The all-new A4 doesn't look wildly different from the outgoing A4. It's not different enough to revolutionise the hotly contested "compact executive" market it's about to do battle in. And the cold truth is that if you're after a car that stirs emotions, offers exhilarating performance, makes all the right noises and delivers undiluted driving pleasure as well as low C02 emissions, the new mid-sized Audi is not the car for you.

But if you take a more clinical, pragmatic approach to the costly process of buying, running and later selling a car, the new Audi A4 presses most of the right buttons. Put it up against its two strongest competitors – the BMW 3 Series and the Mercedes C-Class – and the A4 wins, on paper at least, in several important departments. It's longer, wider and more aerodynamic than its main rivals, has more legroom and greater boot capacity. Most versions have more power, yet every new Audi A4 has a lower price tag than its equivalent BM or Merc. Astonishing.

And it gets better. The trade bibles Glass's Motoring Guide and CAP are predicting that over three years/60,000 miles the new Audi will be the slowest depreciator by far. The forecasts are that a £20,000-odd 3-Series will be worth between 37 and 43 per cent of purchase price after 36 months, with the equivalent figures for the C-Class being 35 to 43 per cent. For new A4, the numbers are a healthier 40 to 47 per cent. So Audi is now boasting that its latest offering has the best residual values in class.

Although the new A4 can be ordered immediately, it doesn't arrive at UK dealerships until February 2008. At launch, just two petrol-powered examples will be available: the 1.8 TFSI at £22,590 and the 3.2 FSI quattro costing £29,680. There are three diesel variants: the 2.0 TDI at £23,940, 2.7 TDI at £28,440 and 3.0 TDI quattro weighing in at £30,290. Power outputs range from 141 to 262bhp. All A4s have six-speed transmissions or, in the case of the 2.7 diesel, a multitronic CVT. The options "list" is more of a heavy-duty catalogue: extras such as B&0 sound system, sat-nav, climate comfort, xenon/LED daytime lights, adaptive cruise control and the Audi Drive Select system can easily add around £10,000.

Having briefly driven all the launch A4s, the most appealing version for drivers living in the real world is the 133mph 2.0 diesel, which officially averages 51.3mpg. That's hugely impressive for a car the same length as a Bentley Continental.

Despite its grace, agility, sheer effectiveness as a cruise missile and good manners as a town car, it is doubtful whether all the A4 versions could see off equivalent BMWs or Mercs in back-to-back behind-the-wheel tests.

But I honestly don't believe that comparatively wealthy private buyers and mid- to high-ranking company car users consider the "driving experience" to be at the top of their priority lists. Rightly or wrongly, such people often want little more than to be associated with the coolest brand, to be seen in the most stylish car with the most fashionable badge. And these people will be turning their backs on the existing BMW 3 Series and Mercedes C-Class and opting for the fresher, hotter Audi A4 instead.

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