Readers may need no introduction to the estimable BMW 3 Series but the 2.0 litre diesel version is not a car too familiar to everyone. It is a car that is becoming a best-seller in Europe but then diesel is literally streets ahead in mainland Europe.

I first encountered the diesel engine a few years ago when BMW launched the Steyr-derived unit on a completely unsuspecting motoring press in Germany. I found myself seated next to a German saloon car racing driver, getting ready for a few laps and expecting to be bemused at the conclusion. After all, this was a diesel car.

A few moments later I was practically g-forced back into the seat and my palms were wringing. I was convinced some practical joke was in motion but it wasn't funny as the car went into a racing line on a circuit I could hardly recognise from the one on which I had sedately driven in a petrol car. What the driver shouted to me at the end was lost in an aural blur and I stumbled off to discover exactly how far diesel technology had come. And it had suddenly come a long way.

A 1995 c.c. output with 150 horse power available at a maximum of 4,000 rpm and a 0 to 60 mph time of 8.9 seconds pretty much sums up the car's potential. This engine has been significantly improved over the previous unit and that was an impressive one. There are new digital electronics, a new rapid heating system that is almost instantaneous and two balance shafts to reduce noise and vibration.

Maximum injection pressure was 1,320 and now it is 1,600 bar, and with a new volume control the amount of fuel compressed to maximum pressure, the system only pressurises what is actually needed. This results in greater economy and efficiency. When you match the increase in pressure and the improved injection you get a quieter engine

Engineers have also improved both the turbo itself and the intercooler. However, it is the levels of noise from the engine that are by far the most impressive. There was a time when diesel clatter was enough in itself to put one off buying an oil-burning car. Nowadays with cars like this, diesel has achieved a refined status. Even in city driving where sounds tend to echo from walls and other traffic the 320 D remains amazingly quiet. At cruising speeds the sound from the engine is perfectly acceptable.

The overall performance is more than adequate. The engine delivers enough punch at all revs and when overtaking in the 50 to 70 mph band there is no sluggishness as one can often find with other diesel engines. Ride and handling are, as one would expect from the 3 Series, practically flawless.

The 3 Series is now quite a motoring institution and, like other great institutions, it does not change dramatically or quickly. The current car is obviously greatly improved on the first one I ever drove but the driving feel is still the same - and that is not today or yesterday. When front wheel drive was becoming the vogue BMW still insisted that driving for the satisfaction and pleasure of it still required rear wheel drive.

The 3 Series is also built to last. As soon as you close the driver's door you will hear the reassuring clunk of heavy German metal. The cabin is practical and, like other German cars, somewhat spartan. You won't find any extraneous detail here and stalks and switches are well located and functional. Neither will you find a CD player as standard, however. Someone at BMW needs to have a think about the fact that cassette tapes are gone the way of 78 RPM records and that even a Fiat Punto as a CD player as standard these days.

At the end of the day 'though the BMW 3 series does tend to set the standard for others and the diesel version is not going to be the exception here. I found it a real pleasure to drive. It is strong, practical, well-built, capable of taking corners effortlessly and has been designed to cruise noiselessly and without any note of clatter. It is also extremely frugal for an engine with its output.

The second generation common rail engine, improved over the first one introduced in the current 3 Series, can give you about 50 miles to the gallon when driven carefully. But it is still an expensive car to buy in the first place!