Audi S4

Things have moved on since the days when driving this car was a dull experience

It's Christmas and we're all broke. Or if we are not, we still wish to appear so in order not to offend those with less liquidity. So one car not to buy might be the Audi S4.

There are other reasons for this. As launched a few years ago, as the second-swiftest of the previous A4 range (the very entertaining, now-defunct RS4 being the swiftest), the S4 was a car without a point. It had a powerful 4.2-litre V8 engine as well as a Quattro four-wheel drive transmission, so it sounded a promising cocktail for those who enjoy muscular motor cars. That promise evaporated within minutes, for seldom has such a tempting combination proved such a dull, disengaging drive.

Since then, there has been a whole new A4 range. It may look much like the old one but the cars really are different. One important change is that the front wheels are set further forward than before, achieved by exchanging the positions of clutch and driveshafts in this longitudinally mounted engine design. This makes the A4 feel and look less nose-heavy.

And now there's a high-performance A4 again, once more called S4, which costs from £36,000. An RS4 will follow, but for now the S4 is a perfect lesson in intelligent downsizing, the process on which the car industry's future partly depends. There are two strands to this, of which the S4 represents one. The other, reducing structural weight, is more difficult to achieve.

The S4's downsizing concerns its engine. Forced induction and direct injection are the way ahead for petrol engines, and so the new S4 has a 3.0-litre V6 with a supercharger. The sound this engine makes is crisp and potent; it sounds much like that of the Porsche Cayman tested on these pages a couple of weeks ago. And the boost from the supercharger is so immediate and progressive that it feels more like a normally aspirated engine with unusually vigorous pulling power.

But here's the really good bit. The new engine has a little less power than the old V8 (333bhp against 344) yet the new car accelerates more vigorously, thanks mainly to a transmission (six-speed manual or seven-speed DSG) that soaks up less of that power. Even better, it produces a lot less CO2: its official 225g/km score, helping it to sneak in just under the gas-guzzler breakline, is a massive 94g/km less than the old S4.

The new S4 has another treat in store, too, best experienced with the optional £2,000 Drive Select package. This adds an electronic rear differential to a four-wheel drive system which is already biased towards the rear wheels except when grip conditions direct otherwise. Drive Select includes adaptive dampers whose adjustment ranges – Comfort, Auto and Dynamic – also adjust accelerator response, steering weighting and the ESP stability system's degree of intervention.

This last is minimal in Dynamic mode, letting you rely on the four-wheel drive and that electronic differential, similar to a Ferrari F430's. In essence, this applies power to the outside rear wheel to hone a cornering line instead of ESP's braking of the inside one. The result is an Audi that you can powerslide on a damp bend, all the while steering with a crispness and naturalness once alien in an Audi and riding over bumps with a similarly alien fluidity. It's an extraordinary feeling; even if you don't indulge in such antics you can still feel a very satisfying connection with your car.

You can have an S4 as a saloon or an Avant estate. But there's one very strange feature in this otherwise admirable car. Its engine is called a V6T, and there are TFSI logos here and there. Until now the T has meant Turbocharger in Audi-speak, but there's no turbo here. Apparently it now simply denotes forced aspiration, be it by turbo or supercharger. Having developed a logical naming system, Audi now sabotages it.

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