Bigger, more refined and more purposeful, BMW's new X3 really has grown up, says Richard M Hammond.

At only a generation old, BMW's X3 model could have been expected to mature with the passage of time, but who would have predicted it would grow up quite so literally?

The dimensions of the new X1 put the model confusingly close to the outgoing X3. If anything, the increased proportions of the all-new X3 mean it stands on the toes of the full-size X5. No doubt the next generation X5 will redress that issue – but don't be surprised to see the new X3 challenging the X5 for its popularity prominence.

The big-selling X5 was the model that proved sport utility vehicles could offer versatility, comfort and handling. The compact X3 failed to impress on the same level. Although it handled with BMW competence and enthusiasm, poor ride quality was chief among the criticisms.

'X' vehicle fans will be pleased to hear that the new X3 emulates its larger sibling in more than just size – a cosseting ride is now standard.

A new suspension set-up has eliminated the crashy quality of the outgoing model. The option of BMW's Dynamic Drive Control is present, which adapts the suspension settings according to driving style and offers manual selection of Normal, Sport and Sport + modes. It won't be missed on models with the basic set-up – the standard suspension offers an ideal combination of the typically responsive BMW experience and a smooth ride befitting a vehicle of the X3's new-found size and luxury.

The exterior dimensions are reflected inside with an impressive amount of rear legroom, the high seating position doesn't impact on headroom and leather is standard on UK models – boosting luxury.

An i-Drive system is also standard for navigating menus via the large colour screen – like the X3 it has overcome a troubled start to boast a polished and refined package.

The X3's range of optional extras is equally impressive, particularly the heads up display system which allows the driver to remain focused on the road but still be kept up-to-date with essential information.

Diesel remains key to the success of models such as the X3, so much so that the X3 is initially launched with a single diesel engine option in the UK. Further engine choices will follow later but, regardless, BMW expects the xDrive20d model with its 184bhp four-cylinder unit to account for some 80pc of sales.

It's set to be one of the most economical choices available from a vehicle of the X3's size and soft-road, four-wheel drive ability. CO2 emissions of 149g/km and 50.4mpg efficiency are achieved through a 25kg weight loss compared with the outgoing model, the standard Efficient Dynamics measures including brake energy recovery and on-demand power application and the addition of stop-start to both the standard six-speed manual and the optional eight-speed automatic.

Refined in terms of road and engine noise at the wheel, the new X3 proves undemanding to drive. The electric power steering provides a measured blend of response, feedback and weight and the manual gearchange offers the usual BMW slick, springy and accurate shifts.

Greater presence on the road will enhance the ownership, rather than the driving, experience. The X3 has a wider, more aggressive stance with more contours and angles in the body panels and light units. It's a much more assured design that will make downsizing from an X5 as palatable as upsizing from a BMW saloon, estate or X1. A considerably more refined and purposeful product, the X3 has grown up in terms of more than just its size.

Model: BMW X3 xDrive20d SE, �30,490 on the road

Engine: 2.0-litre, 184bhp turbocharged diesel unit developing and 28

Transmission: Six-speed manual transmission, driving all four wheels

Performance: 0-62mph 8.5 seconds; top speed 131mph

CO2 emissions: 149g/km

Economy: 50.4mpg