THERE'S no denying the public's seemingly insatiable demand for compact SUVs these days and now the premium brands are entering into the fray.

Audi is the first of the high-end manufacturers to compete in the segment with the launch of its all-new Q2 which will rival the likes of the Nissan Juke, Mazda CX-3 and Vauxhall Mokka.

Built in Ingolstadt, Germany and priced from £22,380, the five-door Q2 is the company's smallest SUV and is available with a choice of diesel or petrol engines, front- or four-wheel drive along with either a manual or automatic transmission.

Trim levels include the traditional SE, Sport and S-line grades, plus an Edition 1 model that is priced from £30,000-plus and only available with certain powertrains.

Buyers can select from 12 exterior colours and in keeping with customer requirements in the sector, Audi has taken the bold step of introducing contrasting C-pillar blades - the bit behind the rear door. A Manhattan grey finish is reserved for SE (optional on Sport), Ice silver for Sport (optional on S line) and matt Titanium grey for S line.

Alternatively Ibis white C-pillar blades are available on all of the three entry trims. The range-topping Edition 1 features its own solid Brilliant black blade with the Audi four rings logo.

The Q2 looks dynamic and athletic from every angle thanks to its strong profile, a single frame octagonal grille, LED headlights with sweeping LED rear indicators, along with smart alloys ranging from 16 to 19-inches in size.

Move inside and the build quality and luxurious touches that help Audi stand out as a premium brand are instantly noticeable.

There's a splash of colour across the dashboard to match the exterior paintwork along with inserts on the seats. While some manufacturers seem to take the personalisation and contrast options a little too far and look somewhat outlandish, the Q2 maintains its refined character and looks beautifully stylish.

The Q2 is richly equipped even from the entry level SE trim. And, of course, the list of options is pretty comprehensive too allowing the customer to stipulate what on-board technology they desire and what budget they want to spend.

Techno treats include the likes of Audi's virtual cockpit with 12.3-inch high resolution LCD display. This allows the driver to choose what information is shown such as sat nav directions, and how it is displayed.

Other features include full smartphone connectivity including Apple Carplay, a pitch perfect sound system, dual zone air conditioning and plenty more besides. One aspect Audi always does very well is keep operations nice and simple.

The car's infotainment system and settings can easily be accessed via a central dial rather than over-complicated buttons and scroll-down touchscreen menus.

Passenger room within the Q2 is very good with ample legroom for tall adults in the back. There is room for three back seat passengers at a push, but ideally two would be a lot more comfortable. Storage options are also good with a boot capacity of 405 litres, increased to 1,050 litres with the split-folding rear seats dropped flat.

Audi believes petrol engines will be the most popular and in particular the 1.4 TFSI Cylinder on Demand 150ps version. So it was a Q2 Sport with that powertrain mated to a six-speed manual gearbox that we tested first.

The car, in dazzling Tango red, was priced at £23,245 (£28,655 with options) and could reach from 0-62mph in 8.5 seconds, topping out at 131mph. According to official figures it can deliver combined fuel economy of 52.3mpg with carbon emissions of 124g/km (on 17-inch wheels).

The Q2 is fabulously comfortable and the elevated driving position results in excellent all-round visibility.

In traffic the car weaved its way effortlessly through the congestion. Then out on the faster roads, it accelerated smoothly and rapidly through the six-speeds.

The road-holding was super-grippy with no body roll even when pushed hard into corners. The steering was light and very precise and another plus-point was how well insulated the car is against engine, road surface or wind noise.

Next up was a diesel option in SE trim. This 1.6 TDI 116PS engine was also mated to a six-speed manual gearbox.

The car was priced at £21,795 (£27,535 with options added). It could reach 62mph from a standing start in 10.3 seconds, maxed out at 122mph, delivered combined fuel efficiency of 64.2mpg with CO2 emissions of 114g/km. Once again it was on 17-inch wheels.

After less than 10 minutes behind the wheel of the diesel model we were in full agreement that the petrol engines will be more popular. Whilst the car still performed well and was comfortable and quite nippy, it was harder work to generate the pace and seemed considerably noisier at higher speeds.

Finally, we took to the road in the 1.4 petrol model again, but this time with Audi's S tronic automatic gearbox and in S line trim level.

This car, costing £27,045 (£34,005 with options) could sprint from 0-62mph in 8.5 seconds, topped out at 131mph, had combined fuel economy of 52.3mpg and carbon emissions of 123g/km. It was on 18-inch wheels.

This particular Q2 proved to be our favourite. It felt agile, responsive, easy to handle and the automatic gearshifts were sharp and clean. The steering wheel mounted paddles are there if you want to take a little more control.

Even though it was on slightly larger wheels than the first two cars, it was still very assured and there was a near-silent cabin environment.

The choice of driving modes through Audi's Drive Select system, which is available from Sport grade upwards, also adds to the enjoyment of the driving experience, with ‘dynamic' mode really cranking up the fun factor.

Being an S line model it featured all the bells and whistles including the likes of leather front seats, an LED interior lighting package, plus options such as a flat-bottomed Sport steering wheel, privacy glass, sports suspensions and an advanced sound system.

All in all, the Q2 is a fabulous new arrival on the compact SUV scene. It may be more expensive than its rivals, but a premium competitor in the segment will help to raise the bar to its highest level.