AS the clock ticked towards the new millennium, BMW produced a car that would herald a new direction for several manufacturers.

It produced a large sports utility vehicle that had the road manners of a car rather than a dumper truck – the groundbreaking X5.

An instant success, it prompted BMW to produce a junior version, the X3, but somehow its big brother’s charm and grace got lost in the downsizing. BMW ended up with what was, for many, a black sheep of the family.

The new generation X3 was faced with not only showing a change for the better, but also stemming a tide of rivals that had jumped on the bandwagon.

With a more classy and cohesive design, it is now much closer in appearance to the X5, and arguably more attractive because of the more compact exterior dimensions.

Slightly bigger than the old car (83mm longer and 28mm wider), and with a more spacious cabin, it will accommodate five adults in comfort, with plenty of room for luggage in the larger boot (a volume of between 550 and 1,600 litres).

Whether you have a family with assorted paraphernalia that comes with them or you just want the luxury of space, the X3 can oblige.

Unusually the X3 came with only one engine option at launch: the 2.0-litre diesel unit seen elsewhere in the range. But looking at the figures it’s not hard to see why.

Power and torque were increased, cutting the 0-62mph time from 8.9 to 8.5 seconds. Yet this performance boost also came with a cut to running costs.

Combined fuel consumption went up by 7mpg to a remarkable 50.4mpg, while C02 emissions were cut to 149g/km.

The BMW X3 is available in both SE and M Sport trim. The 35d comes with a six-cylinder threelitre engine developing 313hp, while the 30d gets a similarlysized engine but with a 258bhp output. Like the higher-powered 20d, the 18d has a four-cylinder diesel unit, developing 143bhp.

I tried out 20dxDrive in M Sport specification, which provides for some extra goodies including 18- inch star-spoke M alloy wheels, chrome-plated door sill finishers with M designation, high-gloss Shadowline exterior trim for the window surrounds, M Sport multi-function steering wheel, sport seats and anthracite headlining.

Its an effortless driving experience on the road. The 2.0- litre unit may raise its voice a little when extended, but the combination of the easy-going power delivery and excellent comfort levels meant there was little to trouble myself and my passengers as we swept along near-flooded roads, happy in the knowledge that the robust X3 is built to not only to provide a comfortable ride in luxurious surroundings but also cope with the vagaries of the weather.

Dual-zone climate control and leather upholstery are standard, while my rear seat passengers were delighted to find their seats could be heated as well as those upfront.

SUV or not, this is still a BMW and so it responds to the driver’s inputs with accuracy and enthusiasm. It is a car for all types of road and all types of surface, feeling right at home just about anywhere.

High-grade materials and intelligent packaging are integral to the X3’s interior. As always, the asymmetrical instrument panel and centre console are orientated towards the driver, while the latest generation iDrive, with 6.5-inch screen as standard, ensures all infotainment capabilities are easily accessible. The 8.8-inch high resolution screen of the navigation system in the Professional Multimedia package featured in the new BMW X3 is the largest on-board monitor in its segment.

The second generation X3 builds on agility of its predecessor with new suspension technology, electronically controlled driver assistance and advanced four-wheel-drive.

For drivers who want to personalise the feel of their BMW X3, Variable Damper Control is available. The electronically controlled dampers adapt to road surface conditions and the style of driving, while the driver is able to influence the action of the dampers by means of the Drive Dynamic Control system.

This function enables the driver to choose between Normal, Sport and Sport+ modes using a button on the centre console. As well as damping behaviour, it can adjust the character of the accelerator, engine response, power steering weight,DSC response thresholds and – if specified – the shifting dynamics of the automatic transmission.

Even on price, this X3 has the edge over the previous version, coming £115 cheaper than the outgoing one, yet with a higher standard specification.

Fact file

BMW X3 xDrive20d M Sport

PRICE: £34,550

ENGINE: 2.0-litre turbocharged diesel unit developing 184bhp

TRANSMISSION: Six-speed manual transmission (auto option available), driving all four wheels

PERFORMANCE: Maximum speed 130mph, 0-62mph 8.5 seconds

ECONOMY: 54.4mpg combined

CO2 RATING: 149g/km