BMW helped invent the compact luxury SUV category with its X3, but that doesn't win it any gold stars. Its revamped 2011 BMW X3 enters a market now thick with similar offerings, and it will take a major effort on Munich's part to get its new crossover back to the head of the pack.

That effort begins with a choice of revised engines. Base level 2011 X3s will roll out of BMW's Spartanburg, South Carolina plant at the end of 2010 with a naturally-aspirated 'N52' 3.0-liter I-6 producing 240 horsepower. The current X3 makes 260 horsepower from its inline six, but the new model is estimated to hit 60 mph at 6.7 seconds, roughly a half-second quicker than the outgoing model. Those with lead feet should head for the xDrive35i, which is powered by BMW's direct-injection 3.0-liter turbo I-6. The engine features 300 horsepower and 300 lb-ft of torque. Acceleration from 0-60 mph will take just 5.5 seconds, according to BMW. Opt for the sport package, and you can push the X3 to a 150 mph top speed.

Both engines will be mated to an eight-speed automatic transmission, putting the proverbial nail in the coffin for the current six-speed manual option. Still, BMW claims the X3 xDrive28i and xDrive35i will be the most efficient and fun-to-drive vehicles in its segment. The current X3 is already competitive on a fuel consumption level, and after our initial drive of a pre-production X3 xDrive35i, it looks as though BMW has delivered on creating a more engaging experience from behind the wheel.

The new eight-speed gearbox has four planetary gearseats and five clutch packs. When a situation demands, the X3 can downshift from 8th to 2nd gear with one clutch pack disengagement, making the switch seem instantaneous.

In the all-wheel-drive X3, torque is typically divided 40/60 percent between the front and rear wheels, although its Performance Control system can shift the torque split to 20/80 percent front to rear when the situation warrants. The system can also help rotate the vehicle by applying additional power to the outside wheel and also applying the inner rear brake. Up to 100 percent of the X3's torque can be sent to the rear wheels in extreme conditions.