The Audi S3 has received a major upgrade, with an increase in output to 329bhp and the addition of a torque splitter system, which has been taken from the latest Audi RS3 mega-hatch.

Both the four-door saloon and five-door hatchback versions of the performance model also receive several minor styling changes, in line with the recent facelift of the regular A3.

The revisions are intended to boost the performance and handling of the S3, which we tested last year in prototype form, to help it keep pace with the BMW M135i and Mercedes-AMG A35.

The S3 retains the Volkswagen Group’s EA888 turbocharged 2.0-litre four-cylinder petrol engine, but its peak power has been boosted by 25bhp and its peak torque raised from 295lb ft to 310lb ft.

Additionally, the seven-speed automatic gearbox now has a more heavily compressed clutch plate, which enables it to handle higher torque loads from rest and is said to halve shift times under full load. That all results in a 0-62mph time of 4.7sec, trimmed by 0.1sec. Top speed remains 155mph.

Audi has also retuned the turbo. During part-throttle acceleration, it will preload to constant revs, which reduces lag when it’s called upon. 

The main mechanical change, however, is the addition of the RS3’s torque splitter, which allows for fully variable torque distribution between the rear wheels.

Audi has also added a new Dynamic Plus driving mode, which uses the torque splitter to send as much power as possible to the rear axle and then to the rear wheel on the outside of a corner, making the car more prone to oversteer.

Other changes include larger brakes, tweaks to the progressive steering system and new suspension wishbones with stiffer pivot bearings that allow for more negative wheel camber.

Audi’s S suspension, which lowers the body by 15mm compared with the regular A3, is standard on the S3. As standard, the S3 sits on 18in wheels, although two new 19in options are available, as are grippy Falken sport tyres.

The styling changes are relatively minor, including a revamped front grille and new side air intakes at the front, along with a revamped front spoiler. The reworked lights include 24-pixel daytime running lights with four selectable ‘signatures’.

There’s also a new rear bumper design specific to S models and four round exhaust pipes, which are optionally available with a titanium silencer.

Inside, there’s a new shifter design, reshaped air vents, standard ambient lighting and a new backlit laser-cut fabric panel in the front doors.

The new S3 will be available to order shortly. UK pricing has yet to be finalised, but it will cost from €55,600 (£47,500) in Germany, compared with an entry price of £45,285 for the current model.