2006 Audi A3 2.0T

Audi has three goals with its new A3: (1) target younger and/or first-time Audi buyers who will (hopefully) move up to more expensive models, (2) pursue those buyers with products built around lower price points, as the A4 has continued to move upmarket. These first two objectives are aimed at (3) seeing Audi's mid-$20K-range offerings become a continued sales success, something Mercedes-Benz and BMW haven't been able to pull off.

Audi's A3 is a sporty, four-door-hatchback complete with the brand's signature grille, aggressive fender flares, and creased character lines that run from the corner of the front headlamps through the fenders and doors to the taillights. Similar to the shortened-wheelbase quattro Sport from Audi's rally-racing past, the A3 somewhat resembles an abbreviated wagon. Only one body configuration--this four-door hatch--will be sold here, since Audi doesn't want to compete against its own corporate cousin, the fifth-generation Volkswagen Golf GTI two-door hatchback, with which it shares some chassis architecture. There's but one A3 engine choice at launch, a 2.0-liter FSI (fuel-stratified injection) turbocharged four-cylinder, although the company will add a 3.2-liter FSI V-6 next spring, along with quattro all-wheel drive.

The new four-cylinder represents the first use of turbocharging combined with direct fuel injection. Smooth and powerful with 200 horsepower, it pulls from 1800 rpm and delivers a fat 207-pound-foot serving of torque. It's more linear than Audi/VW's previous, peaky 1.8-liter turbo four. At the track, we paddle-shifted our Direct Shift Gearbox-equipped tester to a 6.2-second 0-to-60-mph run--it was quicker than one equipped with a conventional manual transmission.

The DSG, which Audi calls an "automatic," is really an electro-hydraulically controlled manual transmission (or auto-clutch manual). You can opt for a standard stick, but why? The DSG is faster and delivers shifts as smooth as in the best automatics. And it blows away everything else in the clutch-pedal-less manual-transmission category. BMW's base-level Sequential Manual Gearbox? Nein. Ferrari's pricey F1? Arrivederci. Toyota's SMG? Sayonara, too.