By CY Chew

IN today's gloomy economic climate, lots of companies are downsizing and trying to do more with less. And although pump prices have retreated, fuel economy is still a major issue with car manufacturers.

Which is probably why Audi is keen to point out that the new S4 is 27 per cent more fuel-efficient than the outgoing model.

The S4 is a souped-up version of the popular A4 sedan. In the latest S4, the displacement is cut from 4.2 litres to a mere 3.0 litres. The engine itself has two cylinders and 11 hp less. Despite the reduction in capacity, the new quattro all-wheel-drive S4 still pumps out 333 hp and 440 Nm to muscle its way to 100 kmh in a scant 5.3 seconds.

The all-new direct injection supercharged V6 engine is mated to a new seven-speed S tronic double-clutch gearbox to give the S4 lag-free acceleration. The impression behind the wheel is that of a brawny normally aspirated V8 engine under the hood.

The only thing missing is the V8 soundtrack.

There are no complaints about the supercharged V6, but the new seven-speed gearbox shifts up less seamlessly than the previous six-speed S tronic. For those who prefer to shift themselves, a six-speed manual is available and cuts the zero to 100 kmh sprint to just 5.1 seconds.

However, an Audi S model is not just about horsepower. The S4 is the first Audi to have the new active sport differential.

Drive torque is continuously being varied between the two rear wheels - torque vectoring in techspeak -so a higher degree of handling performance is achieved by delivering more torque to the outside wheel in a corner, thus turning the vehicle more sharply and precisely.

In Mallorca during a media preview, there was a chance to push the S4 to the edge of its dynamic envelope on a closed circuit to see how effective the new active sport differential is.

Pushed to 80 per cent of its capabilities, the new S4 demonstrated plenty of grip with neutral handling characteristics.

One can feel the active rear differential doing its job, and out of tighter corners under power, the four-wheel-drive S4 hunkers down and stubbornly resists under-steer with its 40:60 front/rear torque split.

Via Audi Drive Select, the active differential, can be set to three modes - Auto, Comfort and Dynamic. Switching between modes, one actually feels the difference in how "aggressive" the torque vectoring can be. Sadly though, the final bias of the car on the test circuit is still towards under-steer.

On public roads though, the active sport differential is more than just techno babble and can be experienced when tackling corners both fast and slow. This feature will soon be available on the S5 as an option and ultimately in all high-power quattro-powered Audis.

Besides the sport differential, Audi Drive Select also controls the optional dynamic steering and adaptive dampers with a bespoke algorithm. Ride comfort between the modes isn't really noticeably different, but the steering effort and sharpness did show a marked increase in Dynamic mode.

Inside the cabin, electric sport seats with the S4 logo are upholstered in a combination of black Alcantara and leather. The rest of the interior is standard A4 fare save for S4 logos on the door sills, steering wheel and instrumentation.

On the outside, the usual discreet touches that denote an Audi S car are also there- aluminium-look side mirrors and a platinum grey grille with vertical detailing are teamed with a redesigned rear bumper incorporating a diffuser and a quartet of exhaust pipes. The car is lowered by 20mm and the arches filled with 18-inch wheels covering the black painted brake callipers featuring 25 per cent more brake pad surface area.

As a pure driver's car, the S4 is let down by steering that could be more precise and a chassis that is a bit too fail-safe. But then, it is not meant to be a track-bias A4 but rather the range-topping A4.

In that respect, the S4 fits the bill perfectly by blending torquey horsepower with a slick-shifting auto gearbox. And it is available in Avant or estate form, which adds a mere 50kg but much more practicality.

Audi's new S4 sedan will arrive next July and will be fully equipped with all the bells and whistles. Even better news is that in Europe, the S4's price will be 10 per cent lower than the outgoing car.

This article was first published in The Business Times on Nov 1,2008.