Audi's new A3 saloon, a first for that line-up, has huge appeal given its compact executive size, says Matt Kimberley of the Press Association.

Few manufacturers have mastered the art of the niche car quite like Audi, and here's another new model it has added to its list. It's an A3 with a saloon boot, making it the first 'three-box' design A3 and a potential starlet to thousands of British buyers.

It's going to be popular. The car finds a balance of talents that marries everything a junior premium car buyer wants, but it's still compact and feels a nicer size on the road. The A4, which is about 25cm longer, might seem a little surplus to requirements next to its younger brother in some potential buyers' eyes.

Extending the body at the back has given this A3 an extra 45 litres of boot space over the hatchbacks, totalling 425 litres, although it loses the boot height advantage of the three-door and Sportback. The exterior changes are more far-reaching than a new boot though.

The saloon is being built in a new Hungarian factory which produces most of the exterior parts in-house. As such it doesn't need to share body panels with the hatchback A3s, so the saloon has been pumped up with more pronounced shoulder lines and body creases so looks tauter and sharper. The boot has a subtle built-in lip spoiler and the wheel arches have been flared more.

Inside there is a range of finishes from functional to stylish. Full leather, cloth and leather/Alcantara options are available depending on model and quality and production standards are generally top-drawer.

Two trim levels have been primed for the car's UK arrival this month. S line is the range-topper. with big wheels and upmarket detailing. with Sport a cheaper entry point but in the same vein of slightly more aggressive styling than you get with the hatchbacks.

A big chunk of A3 saloons are expected to be company cars for drivers who might want to sacrifice size and outright equipment levels of something like a top-spec Ford Mondeo or Vauxhall Insignia for the badge appeal of the smallest Audi saloon. These buyers will have one suitable engine at the car's launch – a 107g/km, 148bhp 2.0-litre diesel.

Two petrols will be on offer as well, with an adequate 1.4-litre TSI turbo benefiting from cylinder on demand technology and a more powerful 1.8-litre TSI. At the end of the year they will be joined by a 1.6-litre TDI diesel.

It will be the lowest CO2 choice at 99g/km and cost less than the larger option but it has all-round ability and in the real-world feels barely less pokey than its bigger brother. It's astonishingly smooth and tractable, too, and if you let the revs drop to just 1,000rpm in fifth gear in slow traffic, accelerating away brings no engine booming or clattering, no vibration through the gear lever and no jerky throttle response. It's incredibly easy to drive smoothly with the 1.6 TDI, and that's good for fuel economy.

As for the ride and handling, three suspension set-ups are available. Sport is standard, with softer, taller 'standard' suspension available as a no-cost option. There's also an S line configuration, but since the Sport variant is a little firm already, especially faced with potholes, S line might be a bridge too far in the UK. Audi's Magnetic Ride suspension is a worthy, if rather expensive optional extra.

There simply aren't any logical reasons not to at least consider the A3 saloon if its size, body style and pricing structure fit your needs. It's nice to drive, affordable to run and looks great. It might not blow your socks off in any area, but nor will it ever give you a reason to regret buying it.