Hard to imagine an entry-level machine with a sticker that starts at $38,000 and stops only a few options shy of $50,000.

But such is the BMW X3, the German automeister's sport-activity vehicle that undergoes a minor styling upgrade outside, a feature upgrade inside and packs a more potent 6-cylinder punch for 2007.

X3 is a smaller companion to the BMW X5, now that the X5 has been stretched by 7 inches in length and 2 inches in both width and height, which allows it to sport a third-row seat for the first time. X3 offers two rows.

The X3 looks a little like a sport-utility vehicle, a little like a crossover. But BMW calls it a sport-activity vehicle, or SAV. It differs from an SUV in that sport and activity mean something. They are part of its character.

It probably would take an X3 aficionado to detect styling differences, changes to head and tail lamps and the additional wood-grain trim inside.

Whatever it looks like, it performs like a sports sedan, a machine with the guts to lead the pack, not follow in their fumes. And its suspension is tuned to tackle long stretches at speed or twists and turns with pinpoint precision and agility. Activity it is. Ride, however, is a bit firm, and you'll hear and feel the radials at times slapping the tar marks below. If you've taken the lull-you-to-slumber Lexus route, you might find the ride a tad harsh.

The big news for 2007 is the 3-liter, 265-horsepower, 24-valve inline 6-cylinder. That's a step up from the 3-liter, 225-h.p. 6 of the past. For those who don't mind spending $40,000 plus for a vehicle but can't stomach paying 10 cents more for its premium fuel, be warned the X3 burns the higher-priced, high-octane stuff.

A new 6-speed automatic allows manual shifting with steering-wheel paddles. The X5 shares the 3-liter as its base engine while offering a 4.8-liter V-8 as well.

Lively movement yet decent mileage (19 m.p.g. city/26 m.p.g. highway) in a vehicle with all-wheel-drive that automatically delivers torque to whichever wheel is slipping--front to rear, rear to front or side to side--to maintain traction and keep the radials planted on the pavement.

While others slithered like snakes over the snow-packed road, the X3 stood its ground within the lane markers in the straight stretches and the twisties. Dynamic stability control is standard and, of course, keeps you in control of the X3. Four-wheel anti-lock brakes also are standard.

As a bonus, hill descent control is standard so you can motor down steep inclines with the engine staying at low speed so you don't have to ride the brake.

BMW insists that the X3 AWD system is meant for on- or off-road use but, without a low setting, we'd probably skip any Baja adventure.

As with any BMW, the X3 is what's called a "driver's vehicle," meaning the instrumentation is easy to see and read, seats offer lots of support to keep you from rocking or sliding and getting out of position with the steering wheel and/or pedals. Steering response is seriously quick without hesitation or wandering.

X3 is easy to maneuver, and parking in the lot or pulling into the garage is simple and quick.

Those who tag along find ample head and arm room in the second-row seat, though knee room depends on how tall those in front happen to be. If 6 feet or shorter, it's more than tolerable.

As a concession to the U.S. market, there are cupholders, but not the 18 we have grown accustomed to in a five-passenger vehicle. There's a single cupholder to serve the pilot, and one that pulls out of the corner of the dash for the front-seat passenger. Second-row passengers are treated to a power plug along the back of the center console and push-button controls for the heated seats back there.

Cargo room is respectable behind the second row, though a pull-out shade that hides the contents also prevents storing tall items. You can, of course, press a few buttons to remove the shade. If you need more cargo space, the second-row seat backs fold, but not flat.

When the second-row seat backs are up, a center armrest folds down, but this provides a small storage container--no cupholders. Guess even BMW passengers are serious about driving and keeping cups at home.

The cargo hold has a power plug along the wall. The flat cover on the floor lifts, revealing where the battery is kept, not hidden storage. A small container in the corner of the cargo hold probably would carry a quart of milk.

A couple gripes, one being a base price of $38,000 without a power liftgate. Can understand skimping on cupholders, but not a power liftgate when you offer a lusty list of options that brings the machine within striking distance of $50,000.

"It wasn't planned when the car was designed and not an easy retrofit," BMW spokesman Thomas Pluchinsky said apologetically, adding that was also the reason there is no storage under the cargo floor.

The X3 comes with a Panoramic moonroof that starts over the front seat and keeps going over the rear. The glass powers open over all of the front seat and part of the second-row seat. So much roof is open, it's almost like tooling around in a convertible. Letting all that air in with the roof open and all the light in with the roof closed makes the cabin feel much bigger than it is.

The test vehicle added several high-ticket options, such as a cold weather package with heated front and rear seats at $1,000; a premium package with folding mirrors, garage door opener, leather upholstery, BMW Assist (its version of GM's OnStar) and Bluetooth system for $2,450; navi for $1,800 (whenever you turn on the ignition key, the screen rises out of the top of dash, though there's a button to motor it down again if you aren't using it); lumbar control for seats $700; Xenon headlamps at $800; and a heated steering wheel at $150 (gloves are much cheaper).

Standard are automatic climate control; power windows, seats and door locks; keyless entry; AM/FM stereo with CD and MP3 player; rear-window wiper/washer; rain-sensing wipers; and automatic headlights.

BMW sold 31,000 copies in 2006, more than the X5, though X5 output was kept low in 2006 with the redesign and a third-row seat coming for 2007. BMW says X3 sales should rise in 2007, but it won't say how much.

If image, prestige and performance take priority over price, check out the X3.

2007 BMW X3 3.0si

Price as tested: $47,101*

THE STICKER

$38,000 Base

$2,450 Premium package with leather seats, power/folding sideview mirrors, universal garage-door opener, auto-dimming rearview mirror with compass, lumbar-assist front seats, BMW Assist satellite communication system and Bluetooth

$1,800 Navigation system

$1,000 Cold-weather package with heated front and rear seats, retractable headlamp washers and ski pouch

$800 Xenon headlamps

$700 Comfort front seats with articulated backs and headrests and lumbar support

$700 Park assist

$676 Premium sound system

$475 Silver-gray metallic paint

$350 Tinted privacy side glass

$150 Heated steering wheel

* Add $695 for freight.

THE NUMBERS

WHEELBASE: 110.1 inches

LENGTH: 179.9 inches

ENGINE: 3-liter, 260-h.p., 24-valve in-line 6

TRANSMISSION: 6-speed automatic

CITY 19 M.P.G.

HIGHWAY 26 M.P.G.

PLUSES

- A smaller, less-expensive alternative to the X5 with two rows of seats.

- High-performance SUV with very good foul-weather manners thanks to all AWD.

- Decent mileage.

MINUSES

- Nearly $48,000 with options.