The market for luxury SUVs is crowded, and every manufacturer is trying hard to differentiate its vehicle from the rest. In typical Audi fashion, the 2013 Q7 is notable for its engaging driving dynamics, elegantly understated interior, cutting-edge electronics and the all-weather assurance of all-wheel drive.

As was the case last year, the 2013 Audi Q7 is offered with the choice of three different engines, including a powerful and slightly more economical turbocharged diesel. This year, however, the TDI diesel receives a slight bump from 225 horsepower to 240 hp. Also new for 2013 is the Audi Connect feature, which adds Google maps and local search functions, weather updates, gas prices and mobile WiFi connectivity.

Along with the new features and praiseworthy traits that carry over, so do the Q7's less favorable characteristics. Foremost, its oversized dimensions and heavy curb weight do not equate to an abundance of interior space. While having a third row of seats is certainly a useful feature, these quarters are quite cramped and suitable for small children only. Cargo capacity is also less than you'd expect from such a large SUV.

If cargo and passenger capacity aren't the biggest selling points for you, you might do better with the smaller Audi Q5; it's more affordable, yet engaging and upscale. If space is a priority, we would also recommend taking a look at the recently updated Mercedes-Benz GL-Class, Infiniti QX56 and Land Rover LR4, all of which provide greater space for third-row passengers and cargo. Choosing the 2013 Audi Q7 will come down to whether you can give up the extra space behind the second row, since the Q7 is a world-class luxury SUV in every other way.

The 2013 Audi Q7 is a full-size, seven-passenger luxury SUV. It is available in Premium, Premium Plus and Prestige trims, with slight differences based on whether you opt for the TDI or 3.0T engines.

The Premium comes standard with 18-inch alloy wheels, rear parking sensors, roof rails, a power liftgate (with programmable opening angle), heated mirrors, automatic wipers, dual-zone automatic climate control, eight-way power front seats with heating and four-way lumbar, leather upholstery, a tilt-and-telescoping steering wheel, a sliding/reclining 40/20/40-split second-row seat and an auto-dimming rearview mirror. Electronic features include Bluetooth phone connectivity, Audi's Multi Media Interface (MMI) and an 11-speaker sound system with console-mounted six-CD changer, in-dash single-CD player, satellite radio and an iPod interface. The TDI Premium gets 19-inch wheels and additional exterior chrome trim.

The Q7 Premium Plus gains adaptive xenon headlights, LED running lights, a panoramic sunroof, a rearview camera, front parking sensors, auto-dimming and power-folding exterior mirrors, driver memory functions, Audi Connect (enhanced Web-based navigation, information and WiFi access), a navigation system and a Bose surround-sound audio system with HD radio and DVD audio capability. The Warm Weather package adds a deep-tint panoramic sunroof, four-zone automatic climate control and manual sunshades for the rear doors and tailgate.

The TDI Prestige adds 20-inch wheels, cornering lights, keyless ignition/entry, a blind-spot warning system, power tilt-and-telescoping steering wheel, ventilated front seats and the Warm Weather package. The 3.0T S line Prestige adds those extra items, plus a more powerful supercharged V6 than the other 3.0T trims, different 20-inch wheels, headlight washers and special S line exterior trim and styling flourishes. The S line items are available on the TDI Prestige in an option package. Other options for both Prestige trims include an adaptive air suspension, 21-inch wheels, adaptive cruise control, a corner-view camera (for merging out of a blind corner), a 14-speaker Bang & Olufsen surround-sound system and an S line package that adds special interior trim.

Some features offered on upper trim levels are available on lower trims. Optional on all trims are rear side airbags, a Towing package and a Cold Weather package, which adds heated rear seats and a heated steering wheel.

Powering the 2013 Audi Q7 3.0T Premium and Premium Plus is a supercharged 3.0-liter V6 that produces 280 hp and 295 pound-feet of torque. The 3.0T S line version of this engine increases power output to 333 hp and 325 lb-ft of torque. An eight-speed automatic transmission and all-wheel drive are standard.

In Edmunds performance testing, a 3.0T Premium went from zero to 60 mph in 6.9 seconds -- an average time for this segment. EPA-estimated fuel economy for both versions of the 3.0T is 16 mpg city/22 mpg highway and 18 mpg combined.

The Audi Q7 TDI is powered by a 3.0-liter turbodiesel V6 that produces 240 hp and a robust 406 lb-ft of torque. Fuel economy is estimated to be 17/25/20.

Standard safety features on the 2013 Audi Q7 include antilock brakes, stability and traction control, front seat side airbags, side curtain airbags and rear parking sensors. A rearview camera is standard on Premium Plus and Prestige trims, while a blind-spot warning system is standard on the Prestige. Second-row side airbags are optional on all trims.

In Edmunds brake testing, both the Q7 3.0T and TDI came to a stop from 60 mph in 132 feet, which is long for SUVs in this class. The Insurance Institute for Highway Safety gave the Q7 the highest rating of "Good" in both the frontal-offset and side crash tests.

Although the 2013 Audi Q7 features full-time all-wheel drive, it is not well suited for off-road excursions. Instead, the Q7 is more at home supplying ample grip on slippery pavement or enhancing cornering prowess. The Q7's large dimensions and ponderous weight put a damper on maneuverability, particularly in tight parking spaces, but the available rearview camera eliminates much of the guesswork. Opting for the Prestige trim's air suspension broadens the Q7's appeal, as the driver can select a more luxurious or athletic setting.

The base 3.0T engine will likely suffice for a vast majority of drivers, while the more powerful S line delivers V8-like power without the fuel economy penalty. Our pick remains the TDI turbodiesel, with its prodigious torque and favorable fuel consumption.

As is the case with nearly all Audis, the 2013 Audi Q7's interior receives high marks for its understated design and use of top-notch materials. The dash is clearly built around the driver, and controls are fairly easy to operate with some practice.

In terms of comfort, adult-sized passengers will be well accommodated in the first two rows. The third row, however, is suitable only for smaller children; most rivals provide quite a bit more space. Furthermore, cargo space falls short of the competition, with only 72.5 cubic feet of space with the second and third rows folded flat -- that's about the same as a Honda CR-V.