BMW's trend-setting X5 has evolved for the better again – and that's the secret of its success, says Matt Joy of the Press Association.

A sport utility vehicle that drove like a car might have seemed like a fancy idea back in the '90s but the BMW X5 changed the rules. Here was a car that had the tough, but stylish, looks of a proper 4x4 and as much off-road ability as all but the hardcore could need. And yet it was comfortable, fast and handled well.

Fast-forward to 2013 and the landscape is totally different. All the major premium players offer luxury SUVs that put on-road comfort and handling at the top of the priority list but also offer varying degrees of off-road ability. But the X5 is back in its third iteration and faces its toughest challenge to date.

The new X5 follows the visual path set by the previous model. There are detail changes rather than a whole new look, but those changes have enhanced what was already a good-looking machine. There are more scoops and air intakes at the front and down the side – the X5 is the first X model with 'air breathers' on the front wings to improve air flow around the wheels for reduced drag.

As before, the X5 looks best on bigger wheels, The M Sport trim will therefore have the most kerb appeal. With 19in wheels as standard plus an M Sport bodykit it has more presence than the SE model as well as a few other welcome goodies.

Don't expect radical change inside either, but then BMW has made subtle evolution of the interior into something of specialist subject. The instruments are crystal-clear and understated, with a small display in the lower quarter to offer a range of information. The main display screen would put some laptops to shame, while the latest version of i-Drive is even easier than before.

And that's before you add in the feelgood factor you get from the X5's cabin. There's leather even on the entry-level SE model so whichever version you plump for you can expect luxury, comfort and space. The quality of the materials remains first-rate, and with such refinement from the drivetrain, comfortable seats and an impressively-smooth ride, it's a pleasure to travel in.

From launch the xDrive30d SE starts the range but the six-cylinder diesel unit has been tweaked for an extra 13bhp and 15lb.ft of torque. It's good news all round because better efficiency pays at the pumps too – fuel consumption is cut by 7.4mpg and emissions by 33g/km to 45.6mpg combined and 162g/km respectively.

Behind the wheel you'll notice that the engine and gearbox are a wonderful pairing. It's easy to forget that the six-cylinder unit is actually a diesel, as it is impressively quiet when cruising yet has a pleasing thrum when you accelerate. And there's plenty of it too – 0-62mph takes less than seven seconds and with the super-slick eight-speed gearbox juggling ratios seamlessly it's easy to access the performance.

It still drives with the genuine BMW spirit too. The steering is keen and, when pressed, it corners with a level of assurance that should be beyond a car of this size and shape. But more importantly the rest of the time the X5 is as comfortable as you could wish for. There are four different suspension options over and above the standard set up including M Sport for keener driving and even greater off-road ability, but the xDrive30d SE doesn't feel like a poor relation.

The latest X5 isn't radically different from the outgoing model, just improved significantly in a number of key areas. And that's the secret to its success. This is a car that can do pretty much anything and go anywhere you'd consider taking it, and provides plenty of feelgood factor into the bargain.