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Small and almost perfectly formed, Audi's A3 saloon is going to be a big hit.

The latest A3 saloon (aka A3 sedan or limousine) has been built to meet demand from the two biggest car markets at present, namely China and the US, where it sells in the fastest growing segment. Demand in Ireland for the compact premium saloon will be considerable, as small saloons in 2012 made up 28% of the market. The four-door joins the standard three-door hatchback and five-door A3 'Sportback' to complete a very smart line-up. It also tops the A3 pricelist, too, starting at €29,950 for the 1.4-litre, 125hp TSI.

Built on the MQB platform that is shared within the Volkswagen group (VW Golf/SEAT Leon/Skoda Octavia), the saloon sits on the same long wheelbase used in the Sportback. The result is a car that can seat five (at a push) but up close looks more like an A4 that has shrunk in the wash. Unlike many compact saloons, it is not just a hatchback with a boot added on to the design. A3 saloon only shares a few exterior components with the Hatch and Sportback, namely the wing mirrors, door handles and front grille and headlights. All the other panels are new - even the bonnet!

The compact executive car's cabin feels like a very familiar place and even not-so-compact executives will fit up front. In the back, it's a different story. While there is a good deal of legroom, my head touched the roof lining and I'm no giant at 5' 10". But buyers will forgive this as the A3 saloon is the first step on the Audi saloon ladder, where there is now a car for all ages and stages in life! Audi has mastered interior layout; the cabin is well-built and all the switches and controls are well-placed. The driving position is near-perfect and only hampered by the slim side mirrors, which look far better than they function. The boot has 425 litres of space – 60 litres more than the hatch and 45 litres more the Sportback – and is therefore big enough to squirrel away loads of cargo.

On the road, the majority of A3 saloons will be front-wheel drive ('Quattro' is available as is a 300hp S3). We tested two A3 saloons in particular that interested us. First up, the 105hp, 1.6-litre TDI (diesel). With its low emissions and standard six-speed manual gearbox (a 7-Speed DSG is available), the TDI was an effortless cruiser and definitely one for the higher mileage user. TDI makes quiet, unexciting progress. If you want a bit more diesel power there are two, two-litres, with 150hp and 184hp available.

The engine that impressed most, however, was the cylinder on demand (COD), 140hp, petrol TSI. It felt eager and, despite being petrol-powered, was happy to deliver great fuel consumption while being capable of putting a grin on your face thanks to its livelier personality. The latest-generation petrol engines are well worth considering. They not only return much better CO2 and mpg figures, but are also capable of making economic sense if you do average mileage. The COD, TSI, 140hp would be my choice. In Ireland, A3 saloon's only real rival is the great-looking Mercedes CLA that is pitted directly against it in terms of entry price.

The Audi A3 saloon is a very smart, business-like machine at a competitive price.

Michael Sheridan