SINCE BMW first introduced the X3 mid-sized Sports Utility Vehicle back in 2003 the sector has grown enormously so it was obvious to the Bavarians they needed to up their game to stay ahead of the pack.

To their credit they clearly appeared to have done so with this latest batch of diesel and petrol powered X3s with its comprehensive update that includes a new platform, better looking body styling, more high tech on-board features and an improved driving experience.

From the outside most will think it looks much the same as its immediate predecessor but there are subtle changes although it's inside and underneath where the majority of the homework has been carried out.

There are three trim levels - starting with the SE, then the xLine and finally the M Sport (as driven here) - with prices from a competitive £37,890 on-the-road all with BMW's now familiar xDrive giving permanent four-wheel-drive across the range.

This latest third generation X3 body is slightly longer (51mm), wider (10mm) and BMW say overall 55kg lighter but crucially it uses the underpinning from the latest 5 Series which is clearly a good omen.

At the front there's a wider light cluster, longer kidney-shaped grille and overall more sloping glass on the body which in essence gives the car a more muscular look about it this time around.

Jump inside and that's where most of the changes are more noticeable with far more generous levels of quality finish with wood and alloy trims, nicer leather and more decent soft plastic finish in the lower parts of the cabin.

Another major improvement is that there's now more interior space , particularly for rear seat passengers, and the actual seats front and rear have excellent all-round lumbar support making it about the most comfortable and spacious cabin in its class.

For the driver behind the wheel of the 2.0d xDrive M Sport the two main bonus points are the eight-speed automatic gearbox and the on-windscreen head-up display which not only gives you an instant speed readout but also warning signs pop up if you stray too close to the car in front.

The gearbox, which effectively replaces the old six-speed automatic gearbox, is a joy to use whether the driver leaves in normal auto mode or changes it into manual and uses the paddle shifts on the steering wheel to move up or down the gears.

Either way the gear movements are highly impressive, extremely quick, slick and without any stuttering in gear changing movements and by far the most impressive all round over any rivals in this department.

The M Sport is priced from £41,380 and this one was powered by BMW's standard 2.0-litre, four cylinder 190bhp turbo diesel engine. There is a bigger three-litre 265bhp turbo diesel on offer - while for drivers who prefer petrol there's the standard two-litre 184bhp or the range-topping M40i with its three litre, six cylinder 360bhp unit.

The M Sport obviously has a few extras on board over the SE or xLine models but across the whole range BMW's backroom team there are improved semi autonomous driving aids and functions and with the now highly regarded xDrive system too it makes driving such a big car so easy and relaxing.

The panoramic roof (now 25cm longer) also makes for a more airy feel particularly for rear seats passengers and overall this new X3 is far more comfortable to both drive and ride, particularly on long distance cruising as encountered on test.

Fuel consumption is also improved and on test the X3 returned and average of 46.5mpg in comfort mode, which is decently near the official 54.3mpg combined figure, and it only dropped to around the 41mpg mark when driven for a time in sport mode and in a more spirited fashion.

With the wintry weather conditions encountered over the test to have the 4x4 permanently on board proved reassuring and was helped by positive steering and even with the M sport lower suspension on board the body roll as such was well controlled with the general ride remaining on the firm side.

Taking the car off road across well saturated fields and down country lanes it proved reliable, dependable and stuck to its task without any dramas.

Overall the M Sport version naturally offers the best of both worlds with simple, relaxing day-to-day use in both urban traffic and out on the motorways cruising while also then switching it into sport mode obviously offers the ability for sensible, sporty driving.