This hotly contested segment has its benchmark in the Lexus ES 300. It blends comfort, style, luxury, and sport into an efficient package at an affordable price. ES 300 manages to offer a little more luxury than others in the class. We Recommend the Acura TL, Audi A4, and new Infiniti G35. All offer comfort, speed, and nimble handling at attractive prices. The sporty and Euro-flavored BMW 3-Series is Recommended as a rear-drive alternative. The "3" has enough bodystyles and engine choices to suit anyone. At the other end of the near-luxury spectrum is the posh and comfortable Buick Park Avenue--an old-school luxo-cruiser from Detroit.

Despite a downbeat economy, 3-Series sales rose 11.8 percent in 2002. Demand remains healthy into '03. Revised '04 coupes and convertibles bow early to help maintain the momentum. Sedans and wagons should offer some of the same new features when they start 2004 this fall.

Bowing with them is BMW's long-awaited "junior" SUV, the X3, designed around major 3-Series components. Look for standard all-wheel drive, a 3.0-liter inline-6, and expected BMW features--including a version of the controversial "i-Drive" control system. Like big-brother X5, the X3 emphasizes quick, comfortable highway transport for four or five instead of off-road prowess. It will resemble the xActivity concept from the 2003 Detroit Show, but will have the usual fixed roof posts instead of a full pillarless design. European sources now expect the next-generation 3-Series in late 2005 for model-year '06. U.S. sales should begin soon afterwards. The redesign brings an all-new platform and a visible size increase, with overall length reportedly stretched to some 177 inches. Height, width and wheelbase go up too, so cabins should be usefully roomier. We'd expect today's 6-cyl lineup to carry over with improved engines and new 6-speed manual and automatic transmissions. But we're also likely to see the first 3-Series V8s, probably with a 3.6-liter engine. The next high-performance M3s definitely get a V8, with horsepower rumored at up to 400. Due about a year before the next 3-Series is a smaller, more affordable derivative, the much-discussed 1-Series. Expected to price in the low-$20,000 area, it's built on a cut-down version of the same new rear-drive platform so BMW can again play profitably in the "entry luxury" market. The 1-Series bows as 4-dr hatchback, but a 2-dr version and a 4-dr sedan and wagon are reportedly in the works. So are a coupe and convertible that will likely be badged 2-Series or Z2. Engines will be 4-cyl only: either a 115-hp 1.8-liter or a 143-hp 2.0, the latter possibly an option. Both are said to be clean-sheet designs with BMW's Valvetronic variable-valve-timing system. Look for 6-speed manual and optional 6-speed automatic transmissions. European sources expect 240-hp "M1" performance models at some later point, perhaps as early as '06.