The 2013 S3 packs a 2.0-liter 300-horsepower engine.

Faced with stiff competition from the recently-launched BMW M135i and the upcoming AMG-tuned variant of the Mercedes-Benz A-Class, Audi has prepared the most potent S3 ever to avoid losing ground in the hot hatch war.

Under the S3's hood lies a 2.0-liter TFSI four-cylinder engine that features a turbocharger and direct injection. Linked to a standard six-speed manual transmission or to an optional six-speed S tronic dual-clutch unit, the mill sends 300 horsepower and 280 lb-ft. of torque to all four wheels via Audi's famed quattro system.

When equipped with the dual-clutch gearbox, the S3 rockets from 0 to 62 mph in 5.1 seconds and goes on to a top speed that is electronically limited at 155 mph. In spite of its sporty nature, Audi promises that the 2013 S3 is capable of returning 34 mpg in a mixed European cycle.

Under hard acceleration a sound flap mounted in the S3's exhaust system opens up to give the engine a deeper growl.

Visually, the S3 stands apart from the regular A3 thanks to a lower ground clearance, a model-specific grille and an air diffuser that is flanked by four chromed exhaust tips. 18-inch alloy rims mounted on low profile tires come standard while beefier disc brakes on all four corners keep things in check.

Thanks to the same weight saving techniques that Audi has applied to the regular A3, the S3 tips the scale at 3,075 lbs., 132 lbs. less than the outgoing model.

Save for a model-specific instrument cluster and a couple of S3 badges, the next-gen S3's dashboard nearly identical to the one found in the A3. The front passengers are treated to bucket seats with "S3" stitched into the seatbacks and the rear seats can fold down in a 60/40 manner for occasional quick trips to the hardware store.

The S3 is equipped with an electronic progressive steering system that is comfortable and smooth when the car is driving in a straight line and direct and responsive on twisty roads, giving the driver the best of both worlds.

The 2013 Audi S3 will go on sale across Europe early next year. It will carry a base price of €38,900 (roughly $50,500) in its home country of Germany.

Live images by Ronan Glon.