The head to head approach continued with the release of the B6 (and then B7) S4, which was positioned as a direct performance rival to the E46 BMW M3.
The B6/B7 never was a match dynamically for the E46 Bimmer, but its sweet V8, everyday/four season Quattro advantages, and (subjectively) superior interior and build quality won over many drivers. (We're still enjoying a B7 S4 to this day.)
Obligatory timeout for the old school S4 vs M3 Top Gear comparo…
The 2018 Audi S4 likewise carves out its own performance space. Although its 4.4 second 0-60 time is eye-catching and quick by any standard, the turbocharged V6 produces just 354 hp -- well shy of the F8X M3, C63 S, and ATS-V's of the world.
But it's not just the pricing differential that will attract buyers to the 2018 S4. Like other current generation "S" models, the S4 appeals to a rationale audience that doesn't treat their daily drive like it’s a lap of the Green Hell.
However, HPDE addicts like yours truly remain the exception, not the rule. For the much larger audience that desires practical road performance and sportiness, along with comfort, and even prioritize factors like fuel economy and four season capability, an S4 is the superior choice.
On the subject of performance, the new S4 strikes us as a much more authentic offering than what's available from competitors. The BMW 340i with "M Sport" package, which is priced equally, is mostly about design and styling. By contrast the S4 delivers bespoke performance components, four driving modes (Comfort, Auto, Dynamic, and Individual), sport adaptive damping suspension, the ability to spec increased performance with options like the "S sport package" and "Dynamic steering," etc. It's a fundamentally different car than the A4. The M Sport version of the 340i, not so much.
Not to mention, Audi has BMW absolutely licked in the interior styling and appeal department…
Nevertheless, if Audi throws an Avant version of the 2018 S4 into the U.S. market we might be forced into irrational buying behavior.
Learn more about the new S4 and waste time with the "build your own" configurator here.
See also: 2016 Audi S7 -- The Sensible Middle Ground?