Mercedes E-Class

The E-Class estate has long been a byword for upmarket flexibility and practicality. The revised 3.2-litre Euro IV-compliant diesel engine is sure to attract more busi- ness users, because it escapes the three per cent tax surcharge. However, with the company about to unveil a 3.0-litre V6 oil-burner with more power, we would advise holding off for the new motor.

Is this the ultimate holdall? With unrivalled boot space in its class, Mercedes' E-Class estate packs practical features, a wide engine range and superb comfort levels.

Best of all, the in-line six-cylinder 3.2-litre CDI diesel powerplant is now compliant with Euro IV emissions standards - great news for company car drivers looking to save on tax.

This has been achieved by fitting a diesel particulate filter and changing the engine management system. The filter is used to remove hydrocarbons and poisonous gases, but the cleverest part of the upgrade is the tweaked management set-up.

Merc technicians have carefully adjusted the unit's burn cycle, so bursts of hot air are directed down the exhaust pipe, blowing away carbon deposits and allowing the engine to breathe more easily.

The modification has already been carried out on the S320 CDI, and it does little to affect this E-Class's performance and economy figures. Complete with 204bhp and 500Nm of tor-que at a mere 1,800rpm, our E320 CDI estate dispatches the 0-62mph sprint in 8.2 seconds, and goes on to a maximum speed of 145mph.

Yet despite the alterations, this engine still struggles to compete with its best rivals. For instance, BMW's 530d is more refined and responds quicker to throttle inputs. With the Mercedes, noise becomes intrusive at high revs and economy is nothing special. The Government combined figure may stand at 38.7mpg, but the best we managed on our test was 31.4mpg, according to the car's trip computer.

However, company buyers will be reassured by the low 194g/km CO2 rating. This compares well with that of the Audi A6 3.0 TDI (229g/km), but isn't quite as good as the 184g/km pumped out by the 530d. Still, the Merc now looks a more tempting proposition - and it's a very good car to boot.

The interior design is attractive, quality is excellent and the cabin is massive - a 650-litre boot makes this the biggest load-lugger of them all. Packed with useful features such as an optional automatic sliding luggage cover and a host of clever extras, there are few better family estate cars around. Neither the Audi nor the BMW rides as well as the super-smooth E-Class.

Even if you can afford the £37,285 asking price of this E320 CDI Avantgarde, though, we would urge you to hold off for the time being. The reason is that this engine upgrade is a stop-gap measure until the introduction of the all-new 3.0-litre V6 diesel.

The arrival date has yet to be confirmed, but the fresh motor will offer 224bhp and 510Nm of torque, as well as being cleaner and more efficient than the current unit. This should give the E-Class the necessary firepower to hit back at Audi and BMW. Factor in the five-door bodyshell, and we could be hailing a new executive estate champ.