Audi’s mid-engine R8 was revealed to the world, to huge customer and critical acclaim, a couple of years ago.

Powered by the company’s renowned V8, it was largely hand-built to provide supercar looks, dynamics, quality and performance with a non-supercar price tag. Indeed, many industry pundits wondered how Audi managed it.

Inevitably, it sold ‘amazingly’ well, while limited production ensured exclusivity. To date, some 1,400 are on the roads.

Time marches on quickly though, (particularly in an R8), and incredibly the V8 now becomes the entry-level model.

Despite frugal times, Audi’s rapidly growing market share has enabled it to invest in new designs and new technology. Cue the new, Lamborghini V10-powered R8.

There are few changes in appearance – why change a successful design? – and the biggest is noticeable in the dark. The adoption of all-round LED lights, is a world first, and will no doubt soon be followed by other manufacturers.

The change is, of course, aural rather than visible. The 5.2-litre, V10 comes from Lamborghini and is the free-revving version of the engine used in Audi’s S8, amongst others. It’s been tweaked to produce 525ps at a mighty 8,000rpm, red-lining at 8,700rpm and despite this, weight is up just 31kg, giving the V10 a power-to-weight ratio of 324ps/tonne. That’s well into the PWR of the lightweight Caterhams… Audi intends selling only 150 a year in the UK, although 1,000 deposits have already been paid.

The initial disappointment of arriving in Andalucia on an uncharacteristically dull and chilly day, having left a warm, sunny London, was instantly dispelled on seeing the red, white and blue line of gleaming road missiles.

Seeing one R8 is eye-catching, but a long row of them is positively breathtaking.

From the low, wide, squat front, featuring those slanting LED lights, through the low profile, forward-biased side view complete with 19-inch alloys, to the clear glass above the mighty V10 at the rear, the R8 is a supercar and no mistake.

It showcases the full range of Audi’s engineering advances, with aluminium space-frame construction, magnetic ride damping and the latest quattro four-wheel-drive technology.

Putting a few bags in the front boot is predictably a squeeze, but it’s deep enough to accept more than just your girlfriend’s Gucci cosmetics bag and a couple of YSL shirts.

And there’s bags of room for two inside, with a surprising amount of stowage behind the seats – enough for two golf bags – and it would be hard not to get comfortable, with plenty of seat and wheel adjustment. Your passenger can of course stretch out in refined comfort.

The R8 is available with Audi’s R tronic sequential gearbox, with six speeds and wheel paddles, or with a delightful, six-speed open-gated fully manual box. Sadly, the company’s renowned DSG twin-clutch box apparently won’t fit.

But the R tronic is very, very good. Changes are quick and smooth, both up and down, and settings can be tweaked extensively for a sportier, harsher feel. There’s inevitably some jerkiness when accelerating hard – you can’t override the laws of physics – but a quick lift off the throttle as you prod the paddle will smooth things hugely if you don’t want racing-style shifts.

Likewise, the R tronic will cleverly allow you to blip the throttle and smooth the path as you drop a gear or two, even delaying the effect of your accelerator prod if you don’t time it quite right.

It’s a benign machine to drive gently and looks after you well when pressing on.

The manual gearbox is a clanking delight and deliberately so. Audi has pandered to customers who want the feel of a pukka racecar in a sophisticated modern machine, by putting in an open-gate six-speeder, which, although taking a while to get used to, soon slots positively and directly home. I can’t help thinking that the manual feels right for this car but the R tronic will be the best-seller.

Although it’s not possible to fully test a car like this in public, the winding roads of the Sierra Nevada foothills allowed a certain amount of low-speed shenanigans, with the smooth, newly-built Spanish highways and (unofficially) co-operative local police allowing us a little bit of sprint action.

The relentless shove in your back when accelerating hard is a powerful experience, in the 0-100mph mould of a blown 911 or a Ferrari 430, but the sound is something else.

From the deep early rumble, rising to the 8,000rpm-plus duotone crescendo, it’s a seriously enjoyable aural assault. And it sounds even better from the outside… The in-gear acceleration is equally mind-blowing; drop a notch or two to overtake someone and you find you’ve already passed them – just make sure you pay attention as the horizon heads towards you at an explosive rate.

Needless to say, cornering and roadholding are exemplary and it doesn’t take long to realise the scope and ability of the car.

It’s capable of far more than most of us would dare try – except three-times Le Mans champion Allan McNish, who was with us on the launch, it’s naturally at its bellowing best.

“It’s a fabulous car,” he said later.

For those interested in the facts and figures, the 0-62mph time is 3.9 seconds, and top speed is a gnat’s whisker under 200mph.

It may not have the flamboyance of a Gallardo but the new R8 has nearly all the performance and panache and will be a lot easier to live with. It really is usable on a day to day basis and doesn’t need to be kept hidden under lock and key waiting for a nice, sunny day. And it costs £40,000 less.

The first V10s will be delivered here early next month (May) with prices for the manual at £99,575 and £104,655 fitted with the R-tronic gearbox.

It’s £20k, (and 100bhp) more than the V8. But if you factor in standard equipment that’s are cost options on the V8, like sat-nav and a hefty Bang & Olufsen music system, it almost becomes a no-brainer.

The first cars are delivered here in the next week or so.