MENLO PARK, CA – For luxury-vehicle makers, the move down market is problematic.

Expanding into lower-cost segments where a growing cadre of more budget-minded new-car buyers is longing for entree to premium brands means trying to find a way to whittle down costs without cutting back on DNA-critical attributes.

Audi takes another crack at devising a winning formula with its all-new A3, which this time comes to the U.S. in a more market-palatable sedan configuration (no more hatchback for now) that is well equipped and priced to sell against fully loaded, more mainstream Honda Accords and Ford Fusions, not to mention new entry-level models from rivals Mercedes and BMW.

Are there some corners cut? Most definitely, particularly on the inside, where Audi long has been considered the industry bar-setter.

But there also are many characteristically Audi touches that help maintain the A3’s connection to the brand, especially for those buyers willing to check off a few options.

The new A3 rides on Volkswagen’s soon-to-be-ubiquitous front-drive MQB platform that also underpins the ’15-model Volkswagen Golf and is offered with VW’s EA888 1.8L and optional 2.0L TSI gasoline engines.

Although the $29,900 A3 is the smallest car in Audi’s U.S. lineup, it’s no longer that small. At about 11 ins. (279 mm) shorter overall than the current A4, it actually is nearly spot on with an A4 of a decade ago in wheelbase and less than 4 ins. (102 mm) shorter in overall length, meaning cabin space is reasonably generous upfront and adequate in the rear.

Despite its more conventional sedan body style, Audi has managed to make the car’s exterior fairly compelling. Like a lot of 4-door models today, the A3 is designed with more of a coupe sensibility, with its rearward-leaning roofline, integrated rear spoiler and character lines that run between the wheel wells on an upward slant from front to back.

Designer Dany Garand says the objective was to evoke the image of a “tailor-made dinner jacket,” not flashy but a perfect fit for the road, and that mostly was achieved by the car’s taut, clean lines.