It’s often been considered the ugly-duckling in BMW’s range of X-models since it arrived on the scene back in 2004, but in many ways the first generation X3 was born into this world with an unfair handicap.

BMW had to position it below the E53 X5, provide it with sufficient headroom for an SUV but ensure there was still sufficient incentive for buyers to trade up to the X5 – so it’s perhaps not surprising that the end result was a slightly awkward shape.

Fast forward to 2010 and the X5 has grown bigger, we’ve got the X1 providing the role of urban/compact SUV which leaves the new X3 with a previous-edition X5 space to fill. Simple really.

There will be a choice of two engine variants at launch – the entry-level 181bhp, 2.0-litre manual X3 xDrive20d with its class-leading CO2 emissions of 149g/km, combined fuel consumption of 50.4mpg and pretty decent performance too – 0-62mph in 8.5 seconds with a top speed of 131 mph. Then there is a leap to the range topping xDrive35i powered by a 302bhp, 3.0-litre, turbocharged straight six petrol engine, CO2 emissions of 204 g/km and the kind of performance figures that would embarrass a Focus RS – 0-62mph in 5.7 seconds and a top speed of 153 mph.

Further X3 models are planned for the UK market, including a 254bhp 3.0-litre xDrive28i petrol and a 201bhp xDrive23d that has the award-winning twin-turbocharged, four-cylinder diesel that was originally fitted in the 123d.

The new X3 has indeed grown in size, length increases by just under 80mm to 4648mm, width by 28mm to 1881mm but it’s just over a centimetre lower at 1661mm. Luggage capacity has also increased by 70-litres to 550 litres.

To give you some idea of how this might alter the X3’s presence on the road, the new X3 is now just 2cm shorter than the original E53 X5 but 1 cm wider and 5cm lower, so the X3 has indeed grown up but what’s really impressive about this transformation is how much more efficient the new X3 has become.

Compare it again with the similar sized E53 X5 and we find that the X3 tips the scales at some 200kg less (when we compare xDrive35i to the E53 X5 3.0i), and with the kind of performance that would leave the E53 X5 in its dust (nearly 3 seconds faster to 62mph) and yet delivering a combined fuel consumption of 32.1mpg against the considerably slower X5’s 21.9 mpg.

So we’ve established that the new X3 is more spacious, has greater road presence and yet delivers very impressive performance and fuel consumption figures for a supposedly compromised SUV.

What’s not to like?

Well, true to form the X3 will continue to divide opinion with its looks. The X3’s exterior styling is an evolution of its predecessor mixed with some elements from the smaller X1. Rear doors are now wider for better access.

The previous generation X3 was often criticised for its cheap interior trim and lack of equipment, but this is unlikely to be levied at the new version. Inside, there’s a new dashboard, multi-function steering wheel, revised seats and trim materials on a par with the 3-series.

Pricing and specification

The new BMW X3 xDrive20d SE is even better value than its predecessor. At £30,490 OTR, it is actually £115 less than the outgoing model, yet is equipped as standard with Nevada leather upholstery, two-zone air conditioning, iDrive controller and colour display.

The new BMW X3 can be specified with a range of innovative features. The choice of options range from a panoramic sunroof, high-end audio equipment and the Professional Multimedia package with hard-disk storage, to automatic boot lid operation and a tow coupling with electronically pivoting ball head.

The choice of systems offered under the BMW ConnectedDrive driver assistance banner is also unique in the segment, and include Head-up Display, Adaptive Headlights, High-beam Assistant and reversing camera including Top View, giving a 360 degree panoramic view for the driver.

Equipment levels should be more than satisfactory for a car in this sector, with the option of an eight-speed automatic transmission, auto start stop function, variable sports steering as an option and the new X3 is the first BMW X model with optional Dynamic Damper Control and vehicle dynamics settings. For the first time in an X3, head-up display is now available together with some of the latest gadgets including internet access via BMW ConnectedDrive and a reversing camera with top view.

Production of the new X3 will take place at BMW’s Spartanburg factory in North America alongside the X5 and X6, and is expected to begin by November 2010 ready for first deliveries in January 2011.