Audi is giving us a photo and video preview of the all-new 2020 A3 Sportback on a challenging road course that’s also used for Portugal’s Azores rally.

The reason Audi took the compact hatchback there is to demonstrate the latest quattro system as well as other technological advancements the new A3 offers. The focus was on the 2020 A3’s latest evolution of the quattro system, which will be optional on some variants and standard on others, such as the new Audi S3 and RS3 hot hatches.

Based around an electro-hydraulic multi‑plate clutch, the quattro AWD is said to maximize stability, grip and driving pleasure as well as efficiency. With support from the adaptive suspension and the progressive steering, the 2020 A3’s quattro system delivers “composed, surefooted and incisive driving characteristics.”

Watch: 2020 Audi S3 Prototype Review Finds It A Better All-Rounder Than Its Predecessor

All-new Audi S3 Sportback test prototype

According to Audi, that is most obvious on tight winding roads and varied mountain and valley stretches. Without going into too many technical details, the quattro drive’s clutch is located at the end of the prop shaft, in front of the rear axle differential. Audi says this position benefits the axle load distribution in particular.

The electronic torque distribution control has been tailored specifically to suit the new A3 and integrated in the Audi drive select dynamic handling system. The AWD system distributes the torque with full variability between the front and rear axles. Under normal driving conditions, most of it goes to the front wheels. However, when the front loses grip, up to 100 percent of drive torque is transmitted to the rear axle – effectively turning the A3 into a rear-wheel-drive car.

All-new Audi S3 Sportback test prototype

Also contributing to the 2020 Audi A3’s improved handling capabilities is the wheel-selective torque control, a software function of the Electronic Stabilization Control (ESC). When the car enters a corner at high speed, the program applies the brakes slightly to the two wheels on the inside of the bend, helping turn the car into the bend, thus preventing oversteer.

The driver can select between three settings of the ESC: ESC On (full intervention), Sport (allows drifting in a controlled, safe manner) and ESC Off (enables a virtually unlimited amount of possible wheel slip).

The more performance-oriented versions of the new Audi A3 will also feature electromechanical progressive steering offering different gear ratios depending on the steering angle. Additionally, the 2020 Audi A3 will also offer a new suspension with adaptive dampers offering three different settings: comfort, auto and dynamic.