The indomitable Audi juggernaut rolls on, and there will be no stopping it. Here's the new version of the biggest-selling and most important money-making model in the range, and Audi isn't leaving things to chance - it's bigger, more efficient, more refined, with a range of superb engines and aggressive styling, including an optional R8-esque strip of LED driving lights to tell lesser road users to get the hell out of the way.

This car is the very essence of Audi - we can expect the new A4 to be good, then, riding as it does on a completely new chassis. Twelve million miles of testing in all conditions on every continent on earth won't have hurt, either.

If this brand isn't a phenomenon in the motoring world already, it is fast approaching it. Look at this year's sales growth - up 5.7 per cent in Europe over 2006, while Mercedes-Benz has dropped 1.2 per cent and BMW has grown only by 0.2 per cent. Jaguar has dropped a startling 20.6 per cent in the same period. Poor old Jaguar. In the UK, it's a similar story: Audi is up by 20 per cent year-on-year, while its premium rivals have struggled, and overall UK market share is up to 4.3 per cent, hot on the heels of BMW (4.58 per cent).

If things keep going the way they are, Audi will soon reduce its rivals to rubble. Even BMW has every right to be genuinely worried in the face of this onslaught. The guys that brought you 'Vorsprung durch Technik' have got the image right, the styling right and the package right - no wonder people are queuing up to buy the cars.

The blue A4 you see on these pages is a 2.0-litre TDI SE turbo-diesel six-speed manual, the car that will make up the bulk of A4 sales in the UK, where about 70 per cent will go to company car users. I can guarantee that any exec would be thrilled to receive one of these, and will immediately be aware of the improvements over the outgoing model. While it looks a little bit heavy from the rear three-quarter view, especially on this standard 17in wheel, the overall effect is purposeful and thrusting. And big. Seriously big.

Bigger is better and the A4 is now comfortably bigger than its rivals from Mercedes-Benz and BMW. Let's compare it to the new Mercedes-Benz C-Class, the current class benchmark: the Audi is 17cm longer, 10cm wider, with a 10cm longer wheelbase than the Merc, yet is the same height.

It has 25 litres more boot capacity, 2.5cm more rear headroom and 7cm more rear leg room. All of these are significant, but the figures can only partially convey the impressive size of this car when you see it in the metal - it is closer in dimension to the original A6 than it is to the outgoing A4.

The proportions are different too - as in the A5 coupe (which uses the same chassis), the front differential is mounted ahead of the front axle, allowing the latter to be moved forward 154mm compared to the old car. That growth has been used to create more space in a longer cabin - and it's something you can feel.

The engine is excellent, as you'd expect of any VW Group diesel. It revs cleanly and quickly, doesn't throw too much noise into the cabin - though it is not as hushed as the equivalent BMW or Merc - and returns very decent fuel economy. It develops 143bhp and 236lb ft of torque, which isn't bad, but that crucial torque figure trails the Mercedes C220 CDI's 295lb ft and the BMW 320D's 251.

Audi argues that at £23,940 for the base 2.0 TDI SE, it beats its rivals on value for money, and it's hard to argue: the Merc's base price of £26,302 seems inflated, as does the 320D's £25,285. But that's before you add any goodies, all of which soon add up. A £40K A4 is a surprisingly easy car to build.

You don't have to look around the interior for long to understand that the A4, as ever, is the class- leader: the design is slightly more fussy than Audis of the past, more 'styled', with its sweeping multi-layered, multi-textured, multi-contoured dash, but that's not a criticism. Audi leads the world for interior design, fit and finish, and this car moves it further ahead.

Equipment levels, even for the standard SE, are pretty impressive: three-zone climate control, 10-speaker sound system with 6.5in colour screen, automatic headlights and wipers and rear parking sensors are all standard.

You have to pay more for the snazzy LED day driving lights, sadly - they come as a package with xenon headlamps and cost £775 - and there are plenty of other expensive options to choose from, including a superb Bang and Olufsen audio system, ventilated seats (a first for this class of car) and a swish, large-screen satnav controlled by Audi's MMI system (a rotary knob surrounded by switches - similar in concept to BMW's iDrive, but vastly superior and more intuitive).

This is a spacious car. There is plenty of shoulder, hip and head room front and back, and the whole effect is open and airy. The rear seat backrest is almost as body-hugging as the front buckets, with a very deeply sculpted shape. Seems like the idea of moving that front axle forward has paid off - this car feels roomier than its German competitors. A big advantage.

Punt it along a challenging road, and the A4 is nimble and neat, doing nothing spectacularly well but not letting its driver down either. The steering has enough directness and feel to make driving the car quickly quite good fun, and although it changes direction swiftly, with minimal body roll, push harder and the inevitable understeer kicks in. Still, it's agile and interesting enough to worry any BMW or Mercedes, if not quite match them - and a quick run in bigger-engined models confirmed the basic quality of the chassis.

With quattro four-wheel-drive punching 60 per cent of drive to the rear wheels, the car has great traction out of corners.The A4's handling is by no means great, merely competent and certainly effective enough for its customers - that extends to the ride, too, which felt borderline choppy over the few bumpy roads we encountered on the launch roads in Sardinia. We await a decent drive in the UK for the final verdict on the ride quality: there's a fair chance the worst roads in Britain will show this car up.

Of the other versions we sampled briefly, the big 3.0 TDI probably suited the car best, while the 2.7 diesel felt a bit tardy, especially mated to the CVT auto - for overall ability, the 160bhp 1.8 TFSI petrol ran the 3.0 TDI close, and I'd choose the petrol engine over the 2.0-litre diesel. The little turbo 1.8 develops plenty of torque (251lb ft), gets from 0-62mph in 8.6secs and still returns 39.7mpg on the combined cycle.

It's a shame we only had a day with the new A4. More time would lead to a greater appreciation of its strengths. Some of the other wizened hacks felt the same - like the car didn't quite live up to its billing, as if all of this technical prowess was achieved at the expense of an identifiable, likeable character. An A6 or an A8 has a tangible, solid, technocratic nature: this car is merely capable.

Other criticisms? The climate switch system is fiddly and over-complex: it forces you to press a button and then twirl a knob to change the fan speed or the way the air is distributed - two actions, which doesn't make it easy when you're fumbling around in the dark. You probably get used to it over time, but why not a single switch for the fan and other functions?

And I found the MMI rotary system a little too complex, certainly more so than the equivalent Mercedes COMAND set-up, which puts the equivalent of Audi's switches onto the screen, making it easier to use. Still, if you've ever ventured into the cryptic world of BMW's iDrive, MMI is a blessed relief.

But these are minor niggles. It was the overall appeal of the car that I couldn't quite get a handle on, given the short time on board. Where the 3.0 TDI Audi A5 absolutely did it for me - blew me away, in fact - the A4 left me feeling a little cold. A full back-to-back group test with its main rivals will definitely be an interesting occasion.

Still, even if I hated the new A4, it wouldn't make any difference to its sales future, which no doubt will be exceptionally strong and keep that Audi juggernaut on track. Fundamentally, this car is superb, a machine that will keep its owners happy and, just as importantly, keep them loyal to the brand. Amazing to think that this is now an old project to the engineers at Audi: they'll already be well advanced on the next, surely even bigger and better, A4.

When I saw the stark sales graph Audi helpfully provided, with Jaguar's plummeting figures taking its bar right into the depths, I couldn't help but feel sorry for the British marque. And those sad figures got me thinking...

Imagine this for a moment: a B-segment Jaguar to take on this Audi - warm, cosseting, luxurious, quiet, with all the dynamic abilities and ride refinement of the XK and XF but in a compact package. It would have grace and pace and a brand image to die for, and it would make you feel special driving it. Moreover, it would have in spades what this new A4 lacks: genuine charm.

Bill Thomas

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