PORTLAND, OR – Mercedes-Benz USA’s ’08 C-Class makes huge strides but falls short of going head-to-head with archrival BMW AG’s venerable 3-Series – a thinly veiled company objective.

Much is right with the fourth-generation C-Class, which comes in two trim levels –

Sport and Luxury – and three configurations – the C300 Sport, C300 Luxury and C350 Sport. Pricing – including a $775 destination charge – starts at $31,975 for the entry-level C300 Sport and tops out at $37,275 for the C350 Sport.

Behind the wheel of a C300 Sport, there is a discernible improvement in driving dynamics compared with the outgoing model.

The ’08 C-Class rides on a new platform, which helps increase rigidity by some 13% vs. its predecessor, Mercedes says. The change is most noticeable during hard cornering, where little to no body roll is detected.

Steering is well balanced and responsive but lacks the feeling of “oneness” between driver and vehicle that BMWs possess.

The 7-speed automatic transmission is good, perhaps even great. But it still does not compare with the short, precise and nearly visceral experience offered by the Bimmer’s manual transmission. Perhaps if there had been an opportunity to drive a manual version of the C-Class, we would have thought differently. Mercedes does offer a 6-speed manual option on the C300 Sport model, but the vehicle was not available for our test drive.

Mercedes officials defend the decision to only offer one manual in the C-Class lineup by citing studies and consumer workshops that show manuals are no longer on customers’ shopping lists. True driving enthusiasts may beg to differ.

Although it can be operated manually via the Touch Shift manual shift option, the 7-speed automatic on our tester is smooth, with nearly imperceptible shift points, much different than the previous-generation C-Class’ abrupt shifting.

One nifty feature is the 7-speed’s ability to skip up to three gears during downshifting, allowing for quick acceleration while navigating erratic traffic in suburban Portland.

The transmission has no discernable lag when punching the ’08 model’s accelerator, unlike the previous-generation C-Class. The token time required to transfer input from the accelerator to the road is impressive.

The credit also goes to Mercedes’ exquisite 3.0L V-6 tucked under the hood. The mill churns out 228 hp and 221 lb.-ft. (300 Nm) of torque, providing plenty of “get up and go” for the 3,527-lb. (1,600-kg) C300 Sport.

Even more tempting is the 3.5L powering the C350, which produces 268 hp and 258 lb.-ft. (350 Nm) of torque – still short of the 300 hp available on the turbocharged BMW 335i, but a move in the right direction.

The V-6 is able to run on E85, a blend of 85% ethanol and 15% gasoline. However, if E85 is not available, which is the case in most parts of the U.S., the C-Class sips premium gasoline. Not a great selling point in these days of $3-plus for a gallon of regular unleaded.

Our C300 Sport came with Mercedes’ upgraded 4MATIC all-wheel-drive system, which first bowed on the up-level S-Class sedan last year.

The new system, which only adds 145 lbs. (66 kg) to the weight of the car vs. the rear-wheel-drive version, features a center differential that can vary front-to-rear torque distribution when needed, providing excellent on-road handling and traction. But at $1,800, the system is a pricey option.

’08 Mercedes-Benz C-Class
Vehicle type Front-engine, all-wheel-drive, 5-passenger sedan
Engine 3.0L V-6
Power (SAE net) 228 hp @ 6,000 rpm
Torque 221 lb.-ft (300 Nm) @ 2,700-5,000 rpm
Compression ratio 11.3:1
Transmission 7-speed auto w/adaptive shift logic and driver shift control
Wheelbase 108.7 ins. (276 cm)
Overall length 182.3 ins. (463 cm)
Curb weight 3560 lbs./1,615 kg
Base price range $31,975-$37,275
Fuel economy 21/28 mpg (11/8 L/100 km)
Market competition BMW 3-Series, Audi A4, Acura TL, Infiniti G35, Lexus IS
Pros Cons
Great AWD system Pricey option
Burns E85 Otherwise takes premium
Improved performance No 3-Series

Outside, the ’08 C-Class is sleeker and more visually appealing than its predecessors.

Styling long has been a key attribute of the Mercedes marque, and the new C-Class effectively builds on that tradition.

The sport model gets a tri-star hood ornament, typically reserved for higher-end models. While it’s a nice touch, it could be a tempting target for thieves.

Inside, Mercedes dials up the luxury factor several degrees vs. the outgoing model, with plenty of supple leather and pleasing woods. Our tester’s interior has a 2-tone look, with the upper dashboard a darker color and lower portions of the cab a lighter hue. Mercedes says the contrast helps minimize glare.

The interiors of the Sport and Luxury models are different, with the former done in dark colors and featuring a generous use of aluminum. The latter is available in cashmere beige and accented with burl walnut trim.

The ’08 C-Class is 4-ins. (10-cm) longer than its predecessor, translating into more shoulder, hip and leg room.

While interior accoutrements overall are nice, there is one sore spot: the controller knob on the lower console that is used to operate audio, navigation and phone options.

Mercedes claims the controller works like a computer mouse, providing “easy, quick operation of many functions that used to require scores of separate buttons and switches.” But we found it counterintuitive in much the same way as BMW’s infamous iDrive.

Mercedes may have eliminated a few buttons and switches here and there, but in doing so sacrificed ease of use, making it difficult to do something as simple as changing the radio station. That’s not a big deal most of the time. But when a driver is barreling down the road at highway speeds, taking his eyes off the road to tune the radio can be risky.

Comparing the new C-Class with the 3-Series may be unfair, as the two vehicles are aimed at different buyers. While BMW owners prefer a more dynamic ride, they sacrifice some of the refinement that draws other buyers to the C-Class.

In any case, the ’08 C-Class is markedly improved over its predecessor in nearly every aspect.

bpope@wardsauto.com