Audi S3 v BMW M235 xDrive Gran Coupé – which is the best everyday performance car?

Times are tough for the average enthusiast in 2025. Cheap hot hatches have pretty much died out, affordable sports coupes are no more and everything that’s left seems to be getting ludicrously expensive. Flagship hot hatches from Mercedes and Audi run to over £60k, which used to be BMW M3 money. The M3 itself is nearly £90k these days, and if you want a brand new Porsche 911 – even a basic Carrera – no less than £103k will do. Inflation is a factor, of course, but external pressures on manufacturers have booted prices completely out of line with what customers are willing to pay in this turbulent financial time. Prices have reached silly levels, perhaps in the hope that PCPs and lease deals will do the heavy lifting.

Which brings us neatly to BMW’s M235 xDrive Gran Coupé and the Audi S3 Sportback: a pair of compact, four-wheel-drive, circa-300bhp performance cars that have recently been subject to a nip and tuck, and cost not far shy of £50k. Yes, really. For a warmed-up sub-M car and what isn’t even Audi’s hottest hatchback. Neither has set the world alight in their previous forms, the Gran Coupé lacking the poise of the rear-drive 2-series coupe, and the S3 being quick but inert to drive, but both have been updated in key areas to fix that – and justify their very punchy asking prices.

Being based on the 1-series’ front-drive platform (also shared with petrol Minis), the Gran Coupé isn’t what you’d call a purebred BMW. But in M235 form it does get bespoke chassis upgrades and a 2-litre B48 four-pot engine putting out 296bhp to do that M badge justice, with this facelifted model gaining a more rigid structure and revised suspension to go with its new design and interior. The part saloon, part coupe silhouette is still awkward and fussy to these eyes, and there’s a whiff of Kia Ceed about the new front end, which probably wasn’t the intention.

Still, it’s more interesting to look at than the Audi, which looks like something Hertz would lend out. It’s just so bland. Without the brushed silver detailing and S badges of older models, there’s no telling that it’s a near-£50k hot hatch, until you get to the rear, where you’ll find a deeper bumper (shared with the cheaper S Line) and quad tailpipes. Happily, Audi has spent money on the important bits, with this latest S3 generating more power from its 2-litre EA888 engine, up from 306bhp to 328bhp, to go with a reworked chassis that includes a secret weapon from the Audi Sport toolbox – a Torque Splitter rear diff. It’s able to transfer all the torque at the rear axle to a single wheel, and works to great effect in the full-fat RS3, giving it a level of turn-in and throttle adjustability way beyond that of its predecessors.

We’ll explore that later, but first up is the BMW. Climb inside and it’s hard to know where to look. The fleshy red upholstery draws your attention straight away, and then you notice the M-coloured stitching, the M-coloured ambient lighting seeping out of the dash, and the pixel-packed dual-screen display ahead of you. It’s a lot to take in. But despite having M colours seared into your eyeballs, the M235 doesn’t feel like a hardened, focused M product when you first get moving. Okay, it would be unfair to expect that from an M Performance model, but it’s still missing a sense of connection and locked-in precision. Overly light, feel-free steering is partly to blame, but once you settle in you can flow the car from point to point and make quick, easy progress.

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Leave the paddles alone and the seven-speed double-clutch ’box slips through the gears to draw from the engine’s torque, which peaks at 295lb ft from 2000 to 4000rpm. That’s 37lb ft down on the pre-facelift model (power is also 6bhp short), presumably to comply with latest emissions regulations, but the motor still feels flexible and punchy. It all makes for a fast, undemanding small saloon, but not exactly a thrilling one.

This car is equipped with the optional M Sport Package Pro, which brings a set of front sports seats and M Sport brakes, along with some M-themed cosmetic details. It’s also fitted with 19-inch M light alloy wheels and adaptive M suspension with frequency-selective dampers and an 8mm lower ride height, with further detail changes to the chassis coming as part of the facelift. The body structure has been stiffened and the suspension kinematics reworked, with increased caster offset at the front to improve steering feedback. Not something I’ve felt so far, it must be said.

Perhaps the M235’s angrier side is hiding in its drive mode menu – ‘My Modes’ in BMW speak. Switch up to Sport, take manual control of the gears, and the engine is surprisingly vocal, booming through the speakers with a bassy synthesised note, shifts slicing home cleanly, if without the sharp edge of the best DCTs. Push hard and there is fun to be had, but in a very un-BMW-like way. You won’t get it moving on the throttle; instead most of the fun happens on the entry to a corner. There’s compliance in the suspension that allows you to pin the weight on the nose, turn in and feel the rear pivot round, the xDrive system straightening things out when it’s time to jump on the power for a clean exit.

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With more speed, that softness makes you conscious of the mass moving beneath you, requiring more measured inputs to avoid becoming unsettled. It makes you think as a driver and gives you options to tweak the car’s balance, but some sharpness and control is missing. The door is open here for the S3.

Sadly, the Audi’s cabin is just as dull as the exterior, which is particularly noticeable if you’ve just climbed out of the BMW. By contrast the S3 is a black hole inside, with swathes of dark trim and very little design imagination. Some elements are a step up, however, such as the tactile switchgear for the climate controls, more conventional and easier to read graphics on the dash and an infotainment system that isn’t as flashy but is simpler to navigate than the BMW’s. The diamond-stitched sports seats are a nice touch, too.

This example has the optional titanium Akrapovic exhaust, but it doesn’t deliver the kind of fireworks you’d expect (blame European noise regulations), with a muted blare that sometimes has a hint of five-pot RS3 in its tone. It’s not as vocal as the BMW from inside, but it does sound much more authentic. Get going and the S3 feels like a more positive, precise car too. The steering is more direct and loads up more convincingly as you apply lock, the gearbox responds more crisply to the paddles, and the body is more tightly controlled. There’s less squidge in the brake pedal, too. Everything is a notch or two more responsive.

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The trade-off is that it doesn’t absorb the surface as well as the softer BMW, transmitting more vibration to the cabin and clunking over imperfections. The M235 can thump over the worst surfaces too, but in the S3 it almost feels like there’s a loose connection or worn suspension bush somewhere. Setting the adaptive dampers to their softest doesn’t cure this, so it’s best to leave them in the middle of the three settings to lean into the extra control this offers.

With the powertrain wound up to Dynamic there’s tangibly more snap to the S3’s delivery, not only in terms of raw speed but extra energy at the top end, where the BMW’s engine flattens off. There’s a little more torque to call on too, with 310lb ft served from 2100 to 5500rpm. Add in a stiffer, more controlled chassis and you naturally drive it harder, leaning into the grip with more confidence. But where the BMW shows flickers of adjustability when moving its weight around, the S3 is more prescriptive, less responsive to tweaks of the throttle when loaded up. One particular corner illustrates the difference starkly. It’s an evil off-camber left-hander that swoops downhill, immediately switching into a second-gear right: a big test for control, weight transfer and stability under braking. The S3 is safe and stable all the way through, but the BMW is up on its toes and free to move around, even requiring a flick of corrective lock with a sharp lift. Funnily enough, of the two it’s the saloon that exhibits more typical hot hatch traits.

So the Audi’s fizzier powertrain and more connected, controlled chassis make it feel more purposeful, but it’s the BMW that seems to be more playful at the limit. What’s the fuss about with the Audi’s fancy rear diff, then, you might wonder? I certainly did to begin with. On tight switchback roads there isn’t the space or opportunity to exploit it, or much sense of it working from very low speeds – contrary to the RS3, which brings it into play more easily thanks to its extra power. In fact, it initially felt like the diff was corrupting the driving experience slightly. With the Torque Splitter in Dynamic mode it can be difficult to pour through corners in a clean sweep, because adjusting the throttle seems to lock and unlock the diff to subtly change your line, requiring a few nibbles at the wheel to stay precisely on track.

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But then the S3 started to click. I was trying to drive it like a rear-drive car, turning in gently and using the throttle to engage the rear in a way that the gutsier RS3 allows you to do. Instead, the S3 comes good through faster corners with more momentum behind you – particularly if you select its Dynamic Plus mode, which apportions as much torque to the outside rear wheel as possible. Carry speed in, lean on the front end and jump on the throttle before you meet the apex. After an initial push from the front end, the S3 swings into a controlled four-wheel drift, which it carries to the exit with the revs up high, tyres skipping along the surface and hunting for grip like you’re in an old touring car. Suddenly it makes sense, and some RS3-style magic comes to the surface. The M235, being softer with a less sophisticated four-wheel-drive system, doesn’t reach such highs.

So, job done Audi? In the sense of beating the M235, yes. But there are other questions the S3 needs to answer, because there’s some very talented – and much cheaper – competition out there. Namely the technically related Cupra Leon 300, which comes in at £5k less, looks more interesting and is bristling with energy. And if you really want a knock-out driving experience, the Civic Type R is still (just about) available for less money than the top-spec, £53,530 S3 Vorsprung and beats it soundly in every area bar straight-line performance and all-weather pace. The S3 is the best it’s ever been, but it still has its hands full at the price Audi is asking for it. L