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AMG's return fire against the Audi RS3. For nine short months, Quattro GmbH could legitimately claim it created the most powerful, fastest production hot hatch in the world, in the shape of the 362bhp RS3. Not any more it can't.

What's AMG done ' fitted some sort of Bloodhound-style rocket motor?

The next best thing ' eked even more power out of the world's highest specific output engine. The facelifted A45 AMG develops 376bhp and 350lb ft, rises of 21bhp and 23lb ft on the original.

Remember, we're talking about a 2.0-litre, four-cylinder engine here. One that's road-legal, fully warrantied by one of the world's most recognised luxury carmakers, and returns north of 40mpg on the official combined cycle.

This incredible motor develops more punch than the V8 in the back of a Ferrari F355. It is, regardless of the moral dubiousness of The Horsepower Wars, a remarkable engineering achievement.

So it's fast, then?

Yes, both on paper, and on a road. The raw stats claim 0.4 seconds have been trimmed from the A45's 0-62mph sprint, which falls to 4.2 seconds. That beats Audi's 4.3 boast for the RS3 (never mind that Top Gear has already timed a fully fuelled RS3 at 3.9 seconds over the same discipline).

The top speed? I ran out of clear autobahn before the A45 stopped pulling, north of 160mph. It's extremely fast.

The diminutive engine is nonetheless tractable, and pulls keenly from zip, though it really prefer life above 3500rpm. And, at last, we've got a gearbox that agrees.

Wasn't it a bit' rubbish before?

It was. And now it's better. The seven-speed dual-clutch is faster on the way up the box than before, more obedient on the way down (if still caught out by a request for multiple changes on the left paddle) and there's no silly whack-in-the-back from the marketing department in the sportier driving modes.

Best of all, in manual mode it'll bang into the rev limiter, and refuses to auto kick-down. Just as it should. Take note, VW Golf R.

And while we're talking about paddles, the gearshifters and steering wheel itself is just lovely. A great size, part Alcantara, with thick, dense paddles nicked straight from the AMG GT. It's a yummy centerpiece for the A-class's nip/tucked cabin.

Tell me more about that gearbox.

The A45's transmission is all about raw speed, and thanks to shorter gear ratios for third, fourth, fifth, sixth and seventh, the acceleration is relentless. Oh, and launch control has graduated from 'amusing' to 'downright uncomfortable'.

The way the A45 initially moves from standstill to, say, 15mph does things to the squishy bits of your body that verge on abuse.

You mentioned 'sporty modes''

Indeed ' the A45 has gone all techy on us. New to the centre console is the rotary Dynamic Select control from the AMG GT. This allows quick switching between Comfort, Sport, Sport Plus and Individual modes, which ramp up throttle response, noise, steering weight, and back off the stability control.

Spec the Dynamic Plus package and this is joined by a max-attack RACE mode (seriously, it's written in capitals), and adaptive suspension.

Sounds pretty simple. Except, you can complicate things by prodding the damper button on the dashboard, which softens the ride into Comfort mode even if you're in Sport, and so on. Likewise the exhaust button for the optional Performance Exhaust. You choose when you want to be antisocial.

That's not all. AMG has found the time to bolt in an optional locking front differential. The new lights and wheels might smack of a gentle facelift, but underneath, the littlest AMG has undergone one hell of a chassis upgrade.

Great. Which boxes should I be ticking?

Ignore the shouty exhaust. There's no tone or music, just more noise. AMG could only do so much with such a highly strung four-banger. The synthetic parps that accompany every gearchange are hilarious the first time, funny for five minutes, then become gratuitous. Embarrassing, almost.

The adaptive ride isn't a game-changer either. Comfort mode is actually rather stiff. I reckon it's about where you'd find Race mode in a Golf R. Yet AMG's actual RACE mode isn't the intolerable mess you'd expect. Bit jiggly, but certainly not unusable.

Different guises could've turned the A45 into a real shape-shifter, but unlike the night-and-day changes in, say,  a Civic Type R, the differentiation just isn't there.

And the front diff? Barely noticed it, during my three laps of the Laustzring. The invisible apex-finding sensation of an RS Megane is AWOL. The A45 prefers a hefty trailbrake to swing the rear axle into action on corner entry, then a leadfoot on the throttle to slingshot the car back out.

Maybe it'll pay dividends on the street, but our road test cars didn't have the differential fitted, so final verdicts will wait until we try an A45 in the UK.

So that's, um, no options, then?

Honestly, on this first impression, none of the chassis or powertrain garnish is vitally worth shelling out for. The A45 retains its rally-raid demeanor without the toys. It's epically fast cross-country, and packs agility to scare serious sports cars, straight out of the box.

Is this now THE hot hatch of choice?

If you want to go fast, then yes. Principally because, unlike an Audi RS3, the Benz enjoys going round corners quickly, instead of simply specializing in straight lines.

However, I've a sneaking suspicion that in its pursuit of hot hatch top trumps glory, the A45 has become a bit of a Numbers Car, like the BMW M3. Great on paper, and undeniably fast, but not quite as interactive or satisfyingly exploitable for regular drivers as less powerful, less expensive stuff. 'Stuff' meaning the BMW M135i or that pesky fast Golf.

Still, it's an addictive car, the new A45, mostly because you can't believe anything so loutish ' so outrageous ' could wear a Mercedes-Benz badge. Everyday-usable hatchbacks simply can't get any faster than this. Can they..?