PREVIOUSLY, the car aristocracy contest had been a fight between Audi's A8, Jaguar's XJ8 and BMW's 7-series, with Audi claiming a 28% stake of the luxury market, leaving the Mercedes-Benz S-class trailing a distant fourth; often disregarded for its politically-incorrect, barge-like proportions and, naturally, price.

But it's all change at the top of the automotive tree. Audi has Mercedes to thank for that. With the imminent launch of the all-new S-class, Audi's hand has been forced. And the result is the latest A8. Four years ago, its revolutionary, lightweight aluminium space-frame chassis and quattro permanent four-wheel-drive threatened to rewrite the ground rules in the luxury class. Four years' hence, and despite few followers, Audi has kept faith with the concept - or in Audi parlance, 'an evolution of a revolution' - adding even more aluminium to the A8.

New grille, bumpers, headlights and door handles are the only external clues to suggest this is a 'new' A8; understated, no doubt, but striking, no. Inside, the only departure from tradition is the white back-lit speedo and rev counter - the rest retain the familiar red-on-black hue. But it's under the skin where the biggest changes occur.

Front and rear suspension links, brake callipers, shock absorber mountings and wheels (in addition to the space frame) are aluminium construction and the myriad of traction and stability gizmos is truly mind-boggling: ABS is almost considered an irrelevance alongside such sophisticates as Electronic Stability Program (ESP), Electronic Brake Distribution (EBD), Electronic Differential Lock system (EDL) and traction control (ASR) which are all standard and which Audi claims offer better comfort, agility and poise on the road.

The A8 also gets a new V8, five-valves-per-cylinder engine in either 3.7-litre or 4.2-litre guise. For the first time this uses a triple-stage variable inlet manifold married to a digital engine management system with electronic drive-by-wire accelerator and its claims are equally impressive: greater torque and power, better fuel consumption and reduced emissions. The 2.8-litre V6 remains (not tested here). The full range for the UK will be 2.8 front-wheel-drive and 3.7/4.2 V8 in quattro all-wheel-drive only; two trim levels suffice: Sport or standard. Prices are likely to be similar to the outgoing model at £36,595 for the 2.8 up to £55,524 for the 4.2 quattro Sport. Clearly this is one sophisticated motor car. But does it work?

With its new aluminium running gear and revised V8, the A8 is not only the lightest in its class but in 4.2 guise the most powerful too. Developing 310bhp at 6,200rpm and a mammoth 302lb-ft of torque at just 3,000rpm, its low to mid-range urge is simply awesome. It flies to 60mph in 6.9 seconds and dispatches slower moving traffic with effortless ease. At 5.34 metres long it's big, but never feels so because its steering is so quick and accurate; add in the power and the A8 4.2 possesses near sports car-like agility.

Four-wheel traction provides immense grip and even with the traction control turned off, it takes a determined driver to unhinge the A8 from its intended line. Don't think the 3.7 is the poor relation here though. With 260bhp at 6,000rpm and 258lb-ft of torque at 3,250rpm it might not reach 60mph until the 8.1-second mark or share the same V8 voice, but that's where its deficiencies start and end.

In truth the new aluminium suspension is much improved over the old model ... or at least it would be if it wasn't matched to huge 17in wheels which ruin the ride, becoming jittery at low speeds. The front-wheel-drive A8 with 'normal' 16in wheels provided by far the best set-up.

All V8 A8s get the five-speed Tiptronic auto, which allows you to change gear manually when you want to, but Audi also pioneered Dynamic Shift program. Put simply, when you want the A8 to shift, it shifts. And it works beautifully. It never once hunted for the correct gear and even in 'drive' mode, DSP downchanged on demand and shifted seamlessly.

In terms of interior ambience and space, the A8 suffers, if only because its smaller brother, the A6, is so good. There's acres of leather on the seats, doors and dash, but the A8 just doesn't feel that special ... especially with items such as satellite navigation and the Bose 'symphony' audio with six-stack CD still on the options list.

If I could choose one car in which to have an accident, the A8 would be high on the list. Besides saving weight, the space-frame chassis forms a rigid shell around the passengers, and there are five, three-point seatbelts each with pre-tensioners, side door beams and eight airbags (two up front, four side bags and two in the roof lining which drop down over the side glass). No surprise, then, to find the latest A8 boasts a maximum five-star NCAP crash test rating.

As a package the A8 has few peers: it performs without fuss or drama, is beautifully made, is a delight to drive and is cheaper than most competitors. But as a £50,000 luxury limousine, which it purports to be, it just isn't that special. Save £10,000 and buy a BMW 540i or Jaguar XJ8 4.0 instead.