The history of the last 20 years has been filled with tipping points--the moments when one commodity gives place to another. In the music industry, the LP gave place to the cassette, which gave place to the CD, which will almost certainly give place to the MP3. And, in Europe at least, we may well be experiencing a tipping point in which petrol gives place to diesel power.

As little as two years ago, the case for diesel was still made on rational grounds--diesel cars used less fuel, which meant they were significantly cheaper to run. But with the advent of second-generation common rail technology, the decision to "go diesel" has become more emotive. In many instances, the diesel variant has become the most desirable car in the range, and this is certainly true of the Audi A8.

Audi's new 4.0-liter V8 is very probably the finest diesel engine on sale today, thanks to a technical specification that is the epitome of Vorsprung Durch Technik. Boasting four valves per cylinder and a second-generation common rail system with one rail per cylinder bank, it injects the fuel through seven-hole nozzles at an extraordinary pressure of 1600 bar. The system is also capable of injecting fuel several times per combustion cycle. Double pilot injection takes place at low engine speeds, single pilot injection in the medium speed range.

There are also two turbochargers, one for each bank of cylinders, and two air-to-air intercoolers. Both turbos boast variable geometry turbines, which means that the flow of exhaust gas to the turbine wheel can be optimized according to the load and engine speed. The maximum boost pressure is a surprisingly high 2.2 bar and everything is controlled by a Bosch EDC16 engine management system.

The net result of this technology-fest is an engine with the highest power and torque outputs of any production V8 turbodiesel. The maximum power is 272bhp at 3750 rpm and there's an astonishing 479 lb-ft of torque available from 1800 to 2500 rpm. This is supplied to the quattro four-wheel drive system via Audi's new six-speed tiptronic gearbox.

Even at start-up, only a discerning ear will be able to tell that this is a diesel car. The traditional diesel clatter has been replaced with a low frequency hum. Pull away and this is replaced with a deep-throated burble that becomes a subtle growl on the application of full throttle. It may not sound quite as harmonic as Audi's petrol V8s, but it's by no means unpleasant, and at cruising speeds this engine is all but inaudible.

And this car is certainly rapid. Audi claims a 0-to-62-mph sprint of 6.7 sec. and an electronically governed top speed of 155 mph. But what these figures can't convey is the effortless mid-range urge--this engine is so smooth that the car gathers momentum almost by stealth. Give the throttle a determined prod, and the A8 settles on its haunches and muscles its way to a higher velocity. If we define a luxury car by its ability to offer instantaneous, effortless performance, then the A8 TDi must be one of the most luxurious cars on sale today.

The TDi also makes an ideal foil for the tiptronic gearbox. The "S" or sport mode is particularly effective. If the lateral acceleration sensor of the Electronic Stability Program (ESP) detects that the vehicle is cornering, the upshifts remain blocked until the end of the corner is reached. The gearbox also won't change up if the accelerator is suddenly released. In Audi-speak this system is known as Dynamic Shift Program, and in one fell swoop it has eradicated most of the frustrations associated with a traditional automatic gearbox.

The rest of the car reflects the A8's traditional virtues and vices. The handsome styling has considerable presence and exhibits none of the vulgarity that blights the BMW 7 Series. Audi is also capable of giving its German rivals a lesson in how to do interiors. The A8 cabin is not only more attractively styled than either the 7 Series or S-Class cockpits, but it is also constructed of higher-grade materials. It genuinely feels like an upmarket, boutique commodity.

The old A8 also exhibited many of these qualities, but it was badly let down by its dynamics. The latest A8 seeks to right this wrong with a sophisticated air-suspension system. It's a big improvement on its predecessor, but the ride and handling balance still lacks the ultimate comfort of the S-Class or the driving flair of the 7 Series. The difference, though, is marginal, and it's doubtful whether this will be a deciding factor in most luxury car purchases.

With a base price in the UK of #57,630 for the short wheelbase version, the TDi costs a little more than the 4.2 V8 (#55,055). The rational case for the TDi surrounds the fuel costs--it averages 29.4 mpg compared with the 4.2's 23.7 mpg--but it is even easier to make an argument for the diesel by describing its performance, refinement and sheer desirability. The age of the diesel really is upon us.

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