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One imagines the executives at Mercedes watching the growth of the premium-compact market and thinking, "Oh, crap." Suddenly, luxurious-but-small cars are where the action is, appealing to a broad range of customers and especially younger buyers, and, unfortunately, Mercedes has had a difficult time selling entry-level premium cars in the past. As a whole, this has not been a market that's shown much interest in Mercedes products, and the company would like to see that change.

Enter the CLA-Class. Hitting the streets this fall in standard and hot-rod AMG flavors, the CLA-Class combines the graceful looks of the CLS-class "coupe-sedan" with a compact body. It's got the distinction of being the first front-wheel drive Mercedes on our shores, and with a starting price under $30,000, it's definitely poised to capture the interest of the premium-compact market.

The CLA-Class has outstanding curb presence. It's a very intense design, especially for a sedan, with a disappearing body line meeting a rising character line near the middle of the body. The hood is wide and prominent, giving the CLA-Class an assertive face. The grille is similar to that of the SL-Class. From the rear, the CLA-Class is curvy like the CLS-Class, but on the smaller body the lines are equal parts graceful and droopy, depending on the angle. This car looks compact, but it's actually about the same size as the C-Class. It's a bit wider, a bit lower and about an inch longer, thanks to the swoopy design. The upgraded CLA 45 AMG is more subtle than most AMG vehicles, distinguished only by pale trim marking the ground effects and unique wheels. If you want your CLA 45 AMG to stand out more, carbon fiber trim is available.

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Inside, the materials are high quality, and the dash is actually quite simple. A single large trim panel is available in a choice of finishes and takes up most of the dash, running behind the 5.8-inch information screen all the way to the passenger door. The standard anthracite trim can be dressed up from Mercedes' palette of aluminum, burl walnut or black ash wood. In the CLA 45 AMG, Recaro performance seats are available. The mbrace2 infotainment suite is standard equipment as well; Mercedes has made the CLA-Class a connected vehicle.

Mercedes' new compact comes in two flavors: quick and fast. The CLA 250 is powered by an all-new direct-injection 2.0 liter four-cylinder engine that was designed specifically for it. The 2.0 produces 208 horsepower and 258 pound-feet of torque. The torquey motor has a lot of grunt at low revs and moves out eagerly, without torque steer. Driven kindly, the CLA 250 returns 26/38 fuel economy. The available 4MATIC all-wheel drive system is unique to the CLA-class. It's biased toward front-wheel drive, and uses an electro-hydraulic multi-disc clutch to engage the rear when it's needed. All-wheel drive will be offered, courtesy of Mercedes' 4MATIC system. A seven-speed dual-clutch automatic transmission is the only gearbox offered, which puts the CLA at a disadvantage compared to Audi and BMW.

This oversight may not be noticeable in the sporty CLA 250, but it's likely to come up when considering the CLA 45 AMG. The more powerful of Mercedes' premium compacts features a unique 2.0 liter turbocharged and intercooled engine. Hand-built like all of AMG's engines are, the CLA 45 AMG produces 355 horsepower and 332 pound-feet of torque, and is equipped with a performance version of the 4MATIC all-wheel drive system. The twin-scroll turbocharger's maximum boost is a whopping 26.1 psi, and heavy-duty components and cooling ensure that it's good to go for extended periods. This is one of the most powerful four-cylinders on the market. 0-60 takes 4.5 seconds and is accompanied by a series of truly thunderous barks from the exhaust. Seriously, the CLA 45 AMG is not subtle at full throttle. Not bad for AMG's first four-cylinder engine. The quick-shifting, reprogrammed transmission is more than able to handle the power and includes paddle shifters, but some enthusiasts no doubt will wish they could row it themselves.

Both CLA-Class engines feature an ECO mode with a start-stop feature.

The CLA-Class does succeed in being sporty, manual transmission or not. The MacPherson strut front, multi-link rear suspension setup provides a relatively stiff ride that may turn off traditional Mercedes buyers but will appeal to driving enthusiasts. The rear axle subframe is designed to reduce harshness and road noise. The electronic power steering is responsive. Mercedes' fashionable little sedan is pleasant to drive, and provides a tasty flavor alternative to BMW and Audi.

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Small though it may be, the CLA-Class can be outfitted with much of the same equipment as the larger Benzes. Driver aids such as Collision Prevention Assist and driver drowsiness-detecting Attention Assist are standard equipment. Collision Prevention Assist uses radar to detect obstacles the driver may not have noticed and sounds a warning if evasive action is not taken. Mercedes' Distronic Plus, Blind Spot Assist and Lane Keeping Assist are available. The Parktronic active parking assist also is an option.

The CLA-Class is a nice little sports sedan, and it's got a difficult task ahead of it. Mercedes says it's aimed at premium compacts such as the BMW 1-Series, Audi A3 and Acura ILX. But its pricing is also going to put the CLA-Class into the ring with the BMW 3-Series and Audi A4 -- two sports sedans that have a long history of success behind them. The CLA-Class' beautiful design, high feature content and the amazing, raucous roar from the CLA 45 AMG's engine are what sets it apart. CLA-Class pricing starts at $29,900 when the car goes on sale in the spring of 2014. That MSRP is almost unheard-of for a modern Mercedes in North America, but options will quickly drive it up. The CLA 45 AMG hits the market first, in November, and stickers for $41,450.

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