AUDI ratchets up the race to produce the best mile-eating compact executive saloon next month when the first new A4 models go out to customers.

Star of the range for the range for high-mileage company car users and families on a budget is likely to be the zero road tax-rated 2.0 TDI ultra which notches up an official combined consumption of 74.3mpg which should translate to a real life average of around the 50mpg mark. Emissions are a mere 99g/km allowing company drivers a BiK rating of just 17%.

The new car - larger, lighter and more powerful than the outgoing model - looks remarkably similar with easily identifiable styling cues such as the huge chrome grille and the scalloped tail lights, yet it possesses greater road presence and manages to make its predecessor appear suddenly rather staid.

It's a tough battle though. The A4 faces stiff competition from a revamped BMW 3-Series, new Mercedes C-Class and of course the dazzling Jaguar XE.

Beneath the skin, the latest A4 is new from the ground up with a multitude of technical changes that are likely to win over new customers who put driving dynamics high on their list of priorities. Audi engineers claim it to be up to 21per cent economical and 25 per cent more powerful.

For a start, the new range has been put on a strictly low calorie diet with some models shedding no less than 120kg. Then there's the totally flat under-tray which has helped the A4 cut through the air cleaner, reducing its drag coefficient to a class best of 0.23. Completing the recipe for quietness and refinement, the A4's sound insulation has been increased making high speed cruising more refined and relaxed.

In fact, it's as quiet as the topline A8 at 100mph, according to its designers.

And there's a nod to keen drivers with the switch to multi-link suspension at the front and rear, improving both ride standard, dexterity and cornering characteristics.

It's not unusual for car makers to claim substantial improvements to refinement at the launch of a new model, but it's pretty rare for the changes to be so clearly and immediately noticeable.

The engine of previous A4 2.0-litre TDI was far from agricultural but the tickover was a tad clattery and the engine note was less than harmonious. Not so now. The new 150ps version both has greater mid-range grunt and is significantly smoother and more silent.

Performance is pretty impressive too, with 62mph coming up in 8.9 seconds and a top speed of 130mph, so it measures up well to the obvious rivals.

I also briefly sampled the beefy 3.0TDI packing almost 270bhp and equipped with Quattro four-wheel-drive and eight speed Tiptronic auto gearbox. While its surge of power throughout the rev band is hugely impressive, allowing it to rocket to 62mph in just over five seconds, its overall composure and refinement is matched by the 2.0 Ultra SE, which at £29,150 is almost £10k cheaper.

Performance and frugality is just part of the story with the new range. An extended wheelbase, and slightly greater width have boosted passenger space. This is particularly appreciated in the rear where legroom is clearly enlarged. There is also more rear headroom. The boot remains about the same with a reasonable 480 litres of cargo space.

Audi remains convinced that for an executive saloon to be successful today, its degree of connectivity and in technological sophistication is just as important as the car's handling and ride.

"Drivers covering 36,000 miles in three years spend the equivalent of 42-days in their car so they want all the facilities possible," said an Audi spokesman. The latest A4 comes with MMI infotainment system which works via a rotary controller to guide you through various menus. The graphics are clear and sharp and can be used in conjunction with the sat nav maps.

The virtual cockpit digital display, first used on the TT, is available as an option and presents an easy to read mapping directly in front of your eyes. Audi's smart phone interface supports Apple CarPlay and Android Auto platforms and displays smartphone contacts navigation mapping.

Audi sales were up by almost 12per cent in Britain last year with a range of 60 models, and the addition of the new A4 promises to increase its grip still further.