As the popularity of compact cars continue to grow in the American market, Audi launches its new A3 Sedan with a base price of $29,900. It sounds like good value, considering the badge, the quality, and the amount of kit you get. But this car has a deadly rival, the new Mercedes CLA, which costs about the same.

The mid-size sedan market is flooded by those who after small sedans with great value. And so long as Kia and Hyundai offer mid-size sedans that, fully-loaded, cost just 20 grand, Audi is going to have a hard time convincing people to spend another 10 Gs to get something that’s no bigger, and comes with some fancy tech that the average buyer don’t really care about. But the introduction of the CLA can heat up the premium compact segment, and even attract some people from the executive class.

2015 Audi A3 Sedan can be specified with stuff like MMI technology, Audi drive select, 4G LTE connectivity and Bang & Olufsen audio system. More conventional standard features include Audi signature LED DRLs and taillights, Bluetooth technology, Audi pre sense basic and a panoramic glass sunroof.

The new Audi A3 is offered with a range of good engines, including a 1.8 TFSI, 2.0 TFSI, 2.0 TDI clean diesel, and a high-output 2.0 TFSI offered in the S3, which easily cracks the $40K barrier. All engines are mated to the standard 6-speed S tronic transmission.