2017 Audi S3 Is the Tiffany Box of Sedans

Swift, sparkly and awfully expensive.

Really now: $51,725 for a small, entry-luxury sedan? A car that shares some of its tastiest bits—engine, transmission, the Volkswagen MQB platform—with the VW GTI and Golf R? VW’s rocking hot hatch remains, in my mind, the world’s best combination of performance and practicality for under $30,000.

I don’t mean to single out the Audi S3 for pecuniary distress. The Audi drives great, as you’d expect from a high-performance version of the widely admired yet somewhat emotionless A3. But the GTI starts from $26,415, compared with $43,850 for the lowest-price Audi S3. Even at $36,015, a lavish GTI Autobahn edition stickers for about $16,000 less than the option-laden S3 I drove, and matches many of its features, including an adaptive suspension, six-speed dual-clutch gearbox and leather-wrapped interior.

Then there’s the even-hotter VW Golf R. Priced from $40,195, it’s motivated by the identical 292-horsepower, 2.0-liter turbo four as the S3, and shares a near-identical Haldex AWD system.

Audi’s first riposte should be evident, so I’ll just speak for them: Our car is an Audi sedan. Theirs is a Volkswagen hatchback. Verstehen sie?

Mounting a more objective defense, if the Audi is more expensive than VW’s Golf-based duffers, it does come off as the club pro, from its dressy style and polished game to the hush that surrounds its every stroke.

Compared with the basic A3—its style demure, verging on the nondescript—the S3 accessories just enough to make you notice its crisply disciplined bodywork and details. To freshen things up, the 2017 model’s mild changes include the A4’s hexagonal single-frame grille and a zig-zagging “undercut” design to its standard LED headlamps. A new strip along the rear diffuser connects large quad exhaust outlets. Up higher, new LED taillamps flash sequential turn signals. And if the S3 still doesn’t garner enough attention, try the new Vegas Yellow paint borrowed from the TTS sports car’s palette. It gleams like a thousand fresh egg yolks, sunnyside-up.

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The reworked interior that greets you is appropriately attired, though some people still don’t love the gummy material that dominates the minimalist dashboard, a black substance that recalls freshly cured tar, fortunately minus the fumes. Brushed aluminum inlays and the knurled surrounds of porthole vents offer luxury reassurance, as do a standard panoramic sunroof, artistic shift knob and tri-spoked, flat-bottomed steering wheel. To pull rank over VW, the $1,450 S sport seat package is a must-have. Beautifully supportive front chairs feature the diamond-quilted leather with winged upper shoulders and fully integrated headrest—no metal posts to mar its shapely form—that Audi does so, so well.

The back seat remains a real-estate surprise, with more legroom than some significantly larger sedans. The 35.1 inches of knee space in back whips its similar-sized rival, the Mercedes CLA, by eight full inches, and exceeds the BMW M240i coupe by two inches. In fact, the Audi's back-seat legroom matches a far-larger BMW 3-Series, and also bests a Cadillac ATS by 1.6 inches. Yet stretch a tape from nose to tail, and you’ll see the Audi is eight inches shorter than the Cadillac overall, at 175.5 inches. For urban dwellers, or anyone who prefers a sporty traffic-slicer with an easy-to-park footprint, the Audi’s outstanding packaging is one of its best selling points. The S3's trunk is less impressive with a class-meager 10 cubic feet, as the Quattro AWD hardware robs space; a front-wheel-drive A3 fares better with 12.3 cubes.

A Technology package further boosts style, safety and functionality, even as it boosts the price by $3,000. To soothe yourself, repeat the fact that its high-design Virtual Cockpit is now shared with $300,000 Lamborghinis, Audi’s Italian cousin in the VW Group. The cockpit’s latest MMI (for Multi Media Information) system spreads its Technicolor dreamcoat across a vast 12.3-inch driver’s display, including the best Google Earth mapping in the business. The view reconfigures as you move through various Comfort, Sport and Sport Plus settings; or with a push of a steering wheel button to position, say, a blown-up digital tachometer at the screen’s center. The package’s features also include a six-month hook-up with Audi Connect, including a 4G LTE WiFi hotspot and Google’s 3D satellite imagery; and the blind-spot monitor called Audi Side Assist.

As for the smallish center screen, perched a bit awkwardly atop the dash, the 2017 S3 adds a feature from hoity Audis like the A8 sedan and Q7 SUV: A combination control knob/drawing pad elicits contacts or destinations by scrawling their first few letters or numbers with a finger.

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Fingers also come in handy to guide the Audi through its fleet paces, beginning with paddle shifters to guide the remarkably smooth, six-speed dual-clutch gearbox. Together with this sweetheart of a four-cylinder, with 292 horses and 280 pound-feet of torque, the S3 can dash from stoplight to 60 mph in 4.7 seconds, Audi says. Some testers have managed as little as 4.4. Put another way, that’s about 0.3 seconds quicker than a Mustang GT with a 435-horsepower V-8, four more cylinders and 143 more horses. It’s called German horsepower, and it’s still better than the other guys’. (Either that, or Audi is totally fibbing about the actual output). That forceful push is accompanied by a smooth purr from the engine that gets growly as revs climb.

Steering is quick and well-weighted but stingy on feedback, as in the A3. But the Audi grips hard and feels limber and agile as only a small car can. It’s not a street mauler in the manner of Mercedes’ 375-horsepower AMG CLA45, or as pure a handler as BMW’s rear-drive M240i and M2 coupes, but it’s satisfying just the same. The Audi’s pleasures are literally quieter, with more room, refinement and luxury than the somewhat bare-bones BMW, or Benz’ explosive yet ham-fisted AMG CLA45. If the Mercedes is a turbocharged time bomb, and the 2-Series a precise chronograph for athletic types , the Audi is a Tiffany box with a sparkly diamond inside.

Quattro AWD gives the Audi an edge over the Bimmers in foul weather. The Audi’s main performance disadvantage is that very Quattro system, in tandem with a chassis that starts life as a front-driver in A3 form. Despite new Quattro programming that sends more power to rear wheels in Dynamic mode, the Audi can’t match the BMW's ability to rotate and stay pugnacious near its handling limit. Spur it hard enough to break the 19-inch tires loose—which does require serious spurring—and the Audi begins to understeer and push off course, but as predictably as a Golden Retriever heading for his favorite hydrant.

As ever, Audi’s S models straddle a middle ground between their civilian issue cars and the more-brutish types offered by BMW and Mercedes. Buyers who want higher, harder ground can wait for next year, and a 2018 Audi RS3 with a lusty 400 horsepower.

That RS3 should be a dandy. But I can only imagine what that little Tiffany box is going to cost.

Lawrence Ulrich, The Drive’s chief auto critic, is an award-winning auto journalist and former chief auto critic for The New York Times and Detroit Free Press. The Detroit native and Brooklyn gentrifier owns a troubled ’93 Mazda RX-7 R1, but may want to give it a good home.