An incredible engine, unlimited grip and potential, on the right roads, to show up far more expensive performance exotica … the latest RS3 is far more serious than its slightly subdued appearance suggests

Seems like just the other day when I initially acquainted, most appropriately on one of the world's most famous rally stages, with what was then the first modern Audi that patently drew direct reference with the the famous historic Quattro rally cars.

In fact, that experience on the Col de Turini with the previous and first RS3 was in 2011.

The road I chose for this car wasn’t on the official drive route yet, as any motorsport fan would know, simply HAD to be driven, being so symbolic in Audi history.

The 1981 Monte Carlo Rally provided one of those moments that made motor sport history; for it was on the Col - high above Monaco - where the Quattro, on full works debut, changed rallying.

On a snow-covered surface 10 kilometres into the season’s first special stage, Hannu Mikkola overtook a Lancia Stratos that had started one minute before him. A moment of impossibility achieved. Audi, and four-wheel-drive, had arrived.

Anyway, it’s September 2016 and I’ve just driven the second generation of the smallest RennSport-badged Audi.

This time not in Europe but home turf. Auckland to Taupo and return does not provide anything like the terrain of southern France; yet potentially the back roads we scampered around maintained a rallying link, for some of this is Rally New Zealand country and thus where the Quattros rampaged on their Kiwi conquering expeditions, starting in 1982. I came, I saw, I too was changed.

To the present. The $99,900 generation two RS3 isn’t quite all new, insofar that it maintains a high-potency 2.5-litre five-cylinder turbo petrol, but with a fresh chassis, body and gearbox (now a seven-speed direct-shift) running through the (also improved) quattro system, plus a host of brand new features it can be called thus.

Yet as much as the look, feel and punch have enhanced, in respect to its most elemental level, where the intangibles of ‘character’ and ‘soul’ reside, then it is no different whatsoever to the forebear that was retired in 2012, after just two years in the showroom.

If enjoyment is the sole barometer, then the car I’m driving – by happenstance in the very same Catalunya red of the one I threw around the hills behind Monaco – presents potent reminder that the more things change, the more they stay the same with this remarkable car. It’s the same kind of well-honed, beautifully-engineered, race circuit-ready fun that leaves the same level of breathless exhilaration and brain-imprinting memory.

Of course, lessons from the first have made the second even better. The engine is even gruntier now, an additional 20kW and 15Nm lifting outputs to 270kW and 465Nm and though overall top speed remains at 250kmh (excepting if you buy a factory chip that takes it to 280kmh), the 0-100kmh time drops from 4.5 to 4.3 seconds.

This 2.5-litre engine is still massively charismatic. Being a five-cylinder – as the original Group B rally weapons’ were – it develops something of the same sound as the competition cars.

At idle, the twin tailpipes emit a deep burble, but as the revs climb past 4000rpm – as they need to, as peak power comes between 5500 and 6800rpm – it progressively becomes a howl, with the enjoyable adjunct of barking and even a bit of back-firing at over-run. It’s so reminiscent of the experience that sent shivers down the spines of eighties’ rally fans, save that the exhaust doesn’t spit flames now.

If anything, theaural side seems more enhanced now, potentially the remind that the RS3 is – for now – the most powerful hatch in the premium section and also, perhaps, because a significant rival, the Mercedes AMG 45 hatch, that arrived into the market just after the first RS3 left, is just as loutish.

There could be a further reason. The bloke who developed that AMG engine was subsequently wooed to Ingolstadt and given the job of sorting this RS3 unit, mostly to add some of the secret spice that makes the AMG unit the most powerful 2.0-litre four of its time. Now, AMG is saying an update of their mill, an ingredient of a mid-life facelift of the performance A-Class family arriving in January, will be gruntier than the RS3’s. BMW, meanwhile, is sitting back in third with its M135i.

Like its predecessor, this RS only knows one way to do fast: Fiercely. The 0-100kmh time now is 4.3 seconds, a 0.2s improvement, and top speed is limited to 250kmh though there’s a factory chip that raises this to 280kmh if required.

The dual-clutch gearbox sends power to the ground via Quattro all-wheel drive with torque vectoring, which can send between 50 and 100 percent of the power to the rear wheels as needed.

To cope with the boosted output, the suspension has been lowered by around 3cms compared to the standard A3 Sportback and magnetic dampers added. The RS3 goes on a diet its latest iteration, too, weighing 54kg less than its predecessor.

It sounds – thanks to Audi NZ having made a sports exhaust that is optional in most places a standard fit here - and behaves more spectacularly than it looks.

No RS car could be called understated, but this one isn’t as flamboyant as some. The exterior wears a front airdam with larger openings and some aluminium flourishes – shiny as standard, matte for extra - and a diffuser at the back gets some more of the same. A roof spoiler, aluminum look for the mirror housings and red-painted brake callipers add a few other touches to catch the eye. But it hardly shouts.

The seats covered in Nappa leather and a flat-bottom steering wheel wrapped in leather and Alcantara are RS-specific touches. But for the really sporty look, buyers can spec optional RS buckets with a carbon shell that weigh 7kg less than the standard units but potentially also trade comfort. Audi fact: They’re the same seats as provisioned in the new R8.

The RS3 isn’t out to suggest Audi has designs to conquer rally’s rough and tumble for a second time, but it certainly has motorsport in its thing; at least so far as expectation that it will be used by enthusiast owners for track day outings.

Fittingly, the highlight of the two-day press launch was spent at Taupo race circuit, in rain that steadily intensified as our two hours there ticked by. Grip levels steadily decreased and soon big puddles had formed in the key braking and turn-in spots. So it was tricky.

Yet the more conditions degraded, the more playful and delightful the car became. Admittedly, yes, it’s a four-wheel-drive car, so typically prioritises immense grip and secure handling above any flamboyant fun at the limit, but it’s hardly without feeling. You can finesse it and there’s reward or bully it … and it doesn’t wilt then, either. Initial understeer from carrying too much pace into a bend could be controlled by nothing more than momentary softening of the throttle. Even when all four tyres were scrabbling across the water, it remained balanced. The steering, also, wins positive comment for providing real feel. And that’s not always a given with RS cars.

It’s still feral, and I wasn’t silly enough to seek to disengage the traction control (doubtless our in-car minder would have kyboshed this anyway), but but with enough pedigree to allow it to suffer foolish behaviour.

The transmission, whose genesis could perhaps be traced back to the then-novel twin-clutch that went into the ultimate 1980s’ Quattro, the S1 E2, is utterly excellent in its action. When the car is in dynamic mode, the powertrain is at its sharpest but, when left to work automatically, it shifts fast and clean, down as well as up. Hand-shifting is more agreeable, because then the engine will allow changes right at the redline, about 600rpm beyond the computer-controlled change point.

The brakes are also trustworthy – and just as well when I found myself at 200kmh on the back straight and with little room left to retard to the recommended 90kmh zig-zag into the start-finish zone. Does anyone need to tick the box for carbon-fibre-ceramic brake rotors at the front, a deep breath option at $12,000?

Out on the open road, the action can be no less intense, and holding back this feisty wee rascal to within acceptable bounds isn’t easy. The best entertainment is to keep to twisting back roads and enjoy the dynamic ability and resolve that allows to perform above and beyond the norm. It really is fascinating and fun to discover, repeatedly, how sure-footed and fleet it is. We couldn’t help reflect that, as a means of getting from A to B extremely quickly it’s another of those wee wonders that will set out to shame most cars twice its price.

The downside? Well, it’s not as relaxed as any other A3. The best that can be said is that it seems a little more fluent in its performance and ride is less concrete than the previous model’s.

It'll crash and judder over bumps and potholes but don’t be lulled; there’s no actual softness here. Even in its comfort setting, the ride is firm. The exhaust noise can be quietened, too, but never wholly quelled. Well, what did you expect? All this comes with the badge.

What else? Though the interior uses high-grade materials, the graphics on the central screen are dated in appearance, particularly with the sat nav. The trim is also dull, hue-wise: It’s that whole German thing with 50 shades of black. Also, it’s not a really roomy car – past experience suggests rear seat passengers will potentially lose even more legroom with those optional sports chairs in place. Then again, anyone coming along for this ride will have to put up with its sheer sportiness anyway.

Squeezing this engine in doesn’t leave any room in the engine bay for a battery. So, Audi has had to relocate it to the boot, thus reducing capacity to a cramped 280 litres.

No true enthusiast will allow such issues to spoil their enjoyment of this fast and unflappable car. Anyone who knew its legendary ancestor are, I believe, simply going to be overwhelmingly delighted by its replacement.

And how many will that be? Four years ago, the distributor figured it might fortunate to sell many a dozen of these a year. That prediction was wholly off-beam; NZ loves fast and potent Ingolstadt cars – in accounting for 9.7 percent of the annual volume of Audi product, our RS uptake is the world’s highest per head of capita. In its last year, the old RS3 accounted for 50 sales.

Audi NZ reckons they will sell 55 of the new version between now and year-end. I wouldn’t be surprised if that prediction also turns out to be a bit light.

It’s simply phenomenal.