The 2010 Audi A3 can mean a lot of things to different people. Straddling the line between wagon and hatchback, while also delivering a blend of utility, prestige and excitement, one would think this jack-of-all-trades car would be in high demand. Instead, sales have been lukewarm at best since the A3 showed up in stateside showrooms in 2005. More likely than not, lackluster sales have been due to the A3's high base price, expensive options and the fact that its hatchback design is unappealing to most Americans.

But let's set that aside for the moment. On the positive side, A3 buyers will get the type of understated upscale cabin that Audi is known for, as well as sporty exterior styling that's a cut above most cars on the road. You also get available all-wheel drive and the added cargo-carrying versatility of the hatchback body style. In the interest of increasing the car's appeal, Audi has given the 2010 A3 some significant changes, most notably regarding engine choices. The range-topping V6 model is no longer available, and a high fuel economy clean-diesel engine joins the ranks. The diesel is pretty much the same as the one found in the Volkswagen Jetta and can get about 40 mpg while also being emissions certified for all 50 states.

These improvements, along with the stately interior and brand prestige, are what help set the 2010 Audi A3 apart from non luxury-brand hatchback/wagon competitors like the VW Jetta and GTI, Mazdaspeed 3, Mitsubishi Lancer Sportback and Subaru Impreza 2.5GT. And as long as you keep your A3's option pricing low, the car's added expense should be worth it. But a loaded-up A3 isn't as appealing in terms of value, and at that point you might as well start checking out more desirable luxury wagons like Audi's own A4 Avant.

The 2010 Audi A3 four-door hatchback is offered in two trim levels: Premium and Premium Plus. Premium models include 17-inch alloy wheels, foglights, leather upholstery, dual-zone automatic climate control, full power accessories, cruise control, a trip computer and a 10-speaker audio system with a single-CD player, satellite radio and an auxiliary audio jack. Stepping up to Premium Plus trim adds xenon headlights, LED daytime running lights, aluminum interior trim, a power driver seat, steering-wheel-mounted audio controls and Bluetooth.

Optional extras for the Premium and Premium Plus A3 include a Cold Weather package (including heated front seats, mirrors and windshield nozzles) and a Sport package that includes 18-inch wheels, high-performance tires, sport seats and a sport-tuned suspension. On the A3's Premium Plus trim level only, you can also add the Convenience package (automatic headlights, rain-sensing wipers, upgraded Bose stereo and auto-dimming rearview mirror), the Titanium Sport package (it's just like the regular Sport package but with special exterior details) and a navigation system with the MMI controller and either a six-CD changer or an iPod interface. Stand-alone options available for all A3s include aluminum or black roof rails, wood interior trim and a panoramic sunroof.

For 2010, the Audi A3 sees some changes in the powertrain lineup. The previous 3.2-liter V6 is no longer offered, but a four-cylinder 2.0-liter diesel is new and utilizes clean-diesel technology. It produces 140 horsepower and 236 pound-feet of torque. The 2.0-liter turbocharged gasoline engine from previous years returns; it produces 200 hp and 207 lb-ft of torque.

Gasoline-powered A3 models are offered with either front-wheel drive or Audi's Quattro all-wheel-drive system. Diesel-powered versions will only be offered with front-wheel drive. Front-wheel-drive gasoline models can be equipped with either a six-speed manual transmission or Audi's quick-shifting S tronic automated dual-clutch six-speed manual gearbox, the latter of which has manual or fully automatic modes. AWD models and the diesel are limited to the S tronic transmission.

In a recent test, we accelerated a front-drive A3 fitted with the 2.0-liter turbo and six-speed manual from zero to 60 mph in 7.2 seconds -- about average among the competition. The EPA estimates fuel economy for this model at 21 mpg city/30 highway and 24 in combined driving. The S tronic is rated at 22/28/24 mpg and the forthcoming diesel should make an impressive 30/42/34 mpg. Audi A3 2.0Ts sold in California and California-emissions states meet the more stringent PZEV tailpipe emissions standards. Fuel economy estimates for the A3 TDI are 30/42/34.

The 2010 Audi A3 follows in the footsteps of the rest of the Audi line by offering a full complement of safety features that includes front-seat side airbags, full-length side curtain airbags, antilock brakes and stability control. Seat-mounted side airbags for rear passengers are optional. The Insurance Institute for Highway Safety awarded the A3 its highest score of "Good" in frontal-offset and side-impact tests.

The 2010 Audi A3's 2.0-liter gasoline engine provides ample power and is well-matched to either transmission choice. When driven hard, front-wheel-drive models have some difficulty making full use of available power due to wheelspin -- a problem that AWD variants don't have.

Like many Audis, the A3's suspension tuning is on the firm side to enhance performance, yet there's still enough compliance to soak up road imperfections. Whether commuting in heavy traffic or cruising down the highway, the A3's cabin remains pleasantly refined. Tight-fitting doors, windows and a streamlined shape all serve to quell wind noise to almost luxury sedan standards.

The 2010 A3's cabin is typical for most Audis, which is to say understated in design with high-quality materials and craftsmanship. There are a bit more hard plastic pieces compared to other Audi models, but they are well-textured to blend in seamlessly. Metallic vent surrounds and knobs further add to the A3's upscale look and feel, as does most of the switchgear.

The A3's cabin isn't without a few minor faults, though. The optional navigation system brings with it Audi's MMI electronics controller, which in the A3 is located on the dash rather than its traditional, easier-to-reach location on the center console. The window controls mounted on the driver's door are situated a bit too far aft and the handbrake tends to bump into the center armrest when operated. The front seats are comfortable, but shorter drivers may have difficulty reaching the pedals due to a lack of forward seat travel. Rear seats are also comfortable, but taller passengers may run out of legroom and headroom -- especially if the car has the optional sunroof.

Luggage space is ample for large suitcases and golf bags, with a maximum capacity of almost 20 cubic feet. The 60/40-split rear seats fold down (but not flat) for bulkier cargo and the center trunk pass-through can accommodate longer items.