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LEADER OF THE PACK: BMW’s 2018 makeover of its popular X3 xDrive30i compact luxury crossover raises the bar in the red-hot premium segment

BMW virtually launched the compact luxury crossover category in 2003 with its first X3.

With its success, it didn’t take long for other premium marques to see the profit possibilities. Now there’s a flood of entrants in this red-hot segment, with competitors from such sources as Audi, Volvo, Mercedes-Benz, Jaguar, Alfa Romeo, Lexus, and even Porsche. Now that’s some highfalutin company.

For its third generation, BMW has given its X3 a thorough makeover, resulting in a superbly balanced entrant that could keep competitors playing catch-up once again.

Powering the new X3 is the excellent 2.0-liter turbocharged four-cylinder that makes an appearance in numerous BMW models. This gem of an engine, cranking out 248 horsepower and 258 pound-feet of torque, is turbine-smooth all the way from idle to redline, with barely a whiff of turbo lag accelerating away from a red light. The engine is surprisingly peppy – and economical, too.

The slick eight-speed automatic transmission, featuring sport and manual shift modes and steering wheel-mounted shift paddles, delivers sure-footed motivation to all four wheels through the standard xDrive.

Driving Dynamics Control lets the driver select among Eco Pro, Comfort, Sport and Sport+ driving modes. Our test car also featured the optional Dynamic Handling Package that adds further fine-tuning of an adaptive suspension.

Handling, as should be expected, is as taut or comfortable as desired, delivered by the push of the appropriate switches.

The cabin is executive class all the way, fitted with multi-adjustable, leather-wrapped sport buckets, a sport steering wheel with multiple redundant controls for infotainment and cruise control features, lots of soft-touch materials, and handsome dark oak wood trim.

But there’s catch: Much of the stuff that raises the X3 to the level of our tester is available bundled in numerous, and costly, option packages. Want lumbar support and a sunroof? You’ll need the Convenience Package. A rear-view camera? Parking Assistance Package. Navigation? Premium Package. And they bump the X3’s bottom line from $42,450 base to a disquieting $57,620. But it delivers a confident, coddling driving experience, as it should at that price.