##audis3.jpg --Right##AUDI will occupy a niche of its own with the launch of the sporting S3 this autumn. At an estimated £26,000 on-the-road, the turbocharged 210bhp S3 - based on the A3 three-door sports hatchback - will have no direct rivals offering similar levels of performance at this price: Audi quotes a top speed of 148mph and 0-62mph in 6.8secs.

Aggressively styled, with flared wheel arches front and rear, lowered sports suspension, bigger bumpers, a roof spoiler, 17in 'Avus' alloy wheels, a six-speed manual gearbox and quattro permanent four-wheel-drive, the S3 certainly looks the part. Further S-pack distinguishing features are a grey grille, subtle S3 badging on the grille and twin tailpipes. Inside, Recaro sports seats, unique dial designs, bright metal door kickplates and high-gloss lacquered trim sets off the cabin.

The execution is impeccable: fantastic build quality, mirror-like paint finish and fastidious attention to detail make the S3 a tantalising pride of ownership prospect. Though there's not a great deal of space in the back seat and the boot is small, the appeal of this car is undoubted to the single people at which, undoubtedly, it is aimed.

In front, there's a chunky three-spoke wheel that's adjustable for reach and rake plus the A3's familiar and stylish dash layout. Fitted with a mildly detuned version of the stunning Audi TT coupe's 1.8-litre four-cylinder five-valve turbocharged motor - to ensure the S3 doesn't overshadow the TT's performance - it is 15bhp less powerful.

But with the A3's three-door hatchback body, its character is totally different. Unashamedly sporting, the ride is firm but not uncomfortable and there's ample steering feedback and just 2.75 turns lock to lock.

Though acceleration is vivid, it's not as explosive as, say, the (much cheaper) Subaru Impreza Turbo's - a car which must be considered the S3's only serious rival. Even then, the four or five-door-only Subaru is not as overtly sporting-looking.

By comparison with the Subaru, the S3's power delivery is lumpy and somewhat unpredictable, the engine developing a tendency to hunt on part-throttle - disconcerting when trying to keep an equal distance from the car in front. Disappointing, too, is the exhaust note, which is anodyne and unexciting and rather too intrusive into the S3's cabin for comfortable motorway cruising. Our test car also suffered an annoying hesitation or flat spot at about 4,000rpm which, together with the sharp clutch action, hampered smooth gearchanging and satisfying progress.

But with such broad-shouldered rubber - 225-section tyres on 7.5in rims - coupled with the four-wheel-drive, the S3 feels positively glued to the road: terrifically stable at high speed, cornering powers are massive suggesting the S3 is a devastatingly quick car cross-country.

Trouble is, for all its sporting credentials, the S3 is ultimately a little uninvolving as a truly enjoyable sports-hatch. It lacks the Impreza's dynamic sparkle and character, and considering the near £5,000 price premium the Audi commands over the Subaru, or its virtual price parity with the forthcoming TT coupe, it's a serious question.

Buy one for its build and design integrity, likely ownership satisfaction and exclusivity: Audi UK expects to sell a total of just 1,000 S3s in Britain.