The Audi A4 Avant has arguably one of the toughest gigs in the automotive industry.

The premium German mid-sizer is charged with the unenviable task of taking on two of the best known and most respected cars on the market, which also happen to be its compatriots: the BMW 3 Series and the Mercedes-Benz C-Class.

The arrival of the new-generation 3 Series Touring early in 2013 is set to make life even harder for the Audi A4 Avant, which has been around in its current third-generation ‘B8’ form for more than five years, making it just a little fresher than the Mercedes.

Giving the A4 a much-needed shot in the arm was a significant upgrade in June that introduced updated styling, more equipment, revised prices and new and upgraded powertrains boasting higher outputs and improved fuel efficiency.

One of those was the 3.0-litre TDI V6 turbo diesel, which replaced the 2.7 TDI V6 as the range-topping engine in the four-model A4 Avant line-up. The versatile powerplant is applied in various states of tune in Audi’s more expensive model lines, from A5 to A8 and Q5 to Q7.

In the A4 Avant, it produces 150kW of power between 3750-4500rpm and 400Nm of torque across a tremendously usable 1250-3500rpm range – all of which represents a 10kW advantage over the old model and a broader rev band for the same peak torque level.

Significantly, the new Audi A4 Avant 3.0 TDI is also 22 per cent more fuel efficient than its predecessor, with an official combined cycle consumption figure of 5.1 litres per 100km. (We averaged 6.7L/100km in a week comprising predominantly suburban and city driving.)

Acceleration from 0-100km/h has also been trimmed six-tenths to 7.3 seconds, which, for comparison’s sake, leaves the big, oil-burning Audi family wagon less than half a second adrift of the Volkswagen Golf GTI in the hustle stakes.

It feels quick, too, and effortless, as you need only step halfway onto the throttle to elicit an enthusiastic surge of power that comes on after minimal lag and continues to pull with encouraging ease into triple figures.

The fact that the engine is paired with a continuously variable transmission (Audi calls it ‘multitronic’) may come as a surprise to some drivers given there are few tell-tale signs of the oft-maligned technology. The engine’s high torque output means it’s happy sitting at around 1000rpm while coasting, at which speed the transmission is not forced to exert itself. And its rapid acceleration means you’re never forced to floor the pedal for too long, doing away with the usually characteristic CVT drone.

Powertrain sounds are well muted inside the cabin, with the diesel emitting a rumble rather than a clatter, and the reasonably refined stop-start system means it’s completely silent at idle.

The brake pedal has that signature Audi firmness and the response from the stoppers is linear and reassuring.

Audi has integrated a speed-dependent power assistance function into the electromechanical steering, with the intention to make the steering light and easily to manipulate at low speeds and meatier as you pick up the pace. The result is a wheel that feels a bit too light in the city and one that demands input corrections as the vehicle’s speed changes through corners. Its weight, responsiveness and level of feedback are at their best at higher vehicle speeds.

The ride is firm, with Audi placing emphasis on a sporty feel rather than plush comfort. It’s far from a boneshaker, however, absorbing ruts and big hits quickly without becoming unsettled or sending shocks through the cabin. The A4 Avant also sits much flatter through corners than its SUV rivals.

Road noise was not an issue from our test car’s low-profile 18-inch Pirelli P Zero tyres, although wind noise off the A-pillars and the top of the windscreen is more offensive than it should be in a premium car.

Other powertrain options in the Audi A4 Avant line-up include the entry-level 125kW/320Nm 1.8 TFSI petrol ($58,500), the frugal 130kW/380Nm 2.0 TDI four-cylinder diesel ($60,900), and the 155kW/350Nm 2.0 TFSI ($67,500), which is the only one to feature a seven-speed dual-clutch transmission and Audi’s quattro all-wheel drive system.

The two cheaper models are identically specified, while the more expensive duo likewise shares its own high-grade equipment package. Standard across all variants are front and rear fog lights, aluminium roof rails, an electric handbrake, cruise control, leather upholstery and floor mats.

Included in the pricier pair is a set of 18-inch alloy wheels (up from 17s), front and rear parking sensors, keyless entry and engine start, xenon headlights and LED daytime driving lights, an auto-dimming rear-view mirror, three-zone climate control, aluminium-look interior trim, steering wheel paddles, electric front seats with lumbar adjust, a 10-speaker audio system with subwoofer and Audi’s MMI navigation plus system with 7.0-inch display, 20GB music storage, two SD card readers, DVD player and voice control.

As is unfortunately the way with German premium cars, however, there are a number of features you might expect to be standard that sit on the options list. Our test car was fitted with almost $10,000 of extras, including the S line sports package ($5800), metallic paint ($1650), electric tailgate ($1050), rear-view camera ($900), assistance package with adaptive cruise control and active lane assist ($900), and heated front seats ($700).

Despite its age, the Audi A4’s cabin maintains its high-tech and ultra-modern appeal. The combination of leather, alcantara, metal and soft-feel plastics makes the A4 Avant a tactile delight, while the contrast of dark greys and brushed metal with the striking white and red interior lights creates a crisp, contemporary cockpit.

Our car’s S line sports seats were supportive (the extendable under-thigh cushions are a highlight) and exceptionally adjustable, although there’s no footrest. Visibility from the driver’s seat is compromised slightly by the thickish A-pillar bases, but large windows – particularly between the C- and D-pillars – mean head-checks can be performed with relative clarity.

Where the cabin does show its age is in its overcomplicated array of controls laid before the driver. We counted 28 buttons across the dashboard and centre console, four joystick-style dials, the engine start button and the electric handbrake release, not to mention three more buttons on the steering wheel and two rotary wheels that can also be depressed, three stalks behind the wheel (again with more buttons), and two gearshift paddles.

It’s all a bit overwhelming, and excessive when compared with the all-new Audi A3 (due here in 2013), which offers at least as much functionality, but is cleaner and more technologically advanced.

Fortunately, the A4’s systems are all reasonably intuitive, often with more than one way of reaching the same end. Effortless Bluetooth pairing and an excellent navigation system that – unlike the inferior/infuriating units found in some of its rivals – can be programmed on the go are among the highlights.

Two 6ft adults can ride in comfort in the back, although limited foot space beneath the front seats may force their knees to float around. The centre position is firm due to its broad armrest, and despite being a wagon you have to pay extra for a ski port..

The boot itself, at 490 litres, is 10 litres larger than the sedan’s, and expands to 1430 litres with the rear seats folded forwards. An adjustable cargo area cover, a versatile mesh partition safety net, a reversible boot floor (one side carpeted, one side hard-wearing), and a series of eyelets, hooks and storage compartments confirm practicality and versatility remain top priorities for the A4 Avant.

The Audi A4 Avant may be getting on in years, but doesn’t show its age in terms of powertrain sophistication and efficiency, dynamic ability or interior quality. It’s not cheap, especially once you through in some options (some of which, like the rear-view camera, should be standard), but as a premium family car that rides better than an SUV and is more versatile than a sedan, it scores well.

Audi A4 Avant manufacturer’s list prices:

• 1.8 TFSI multitronic – $58,500
• 2.0 TDI multitronic – $60,900
• 2.0 TFSI quattro S tronic – $67,500
• 3.0 TDI multitronic – $71,900