With Toyota/Lexus and Nissan/Infiniti already wrestling BMW and Mercedes for some small portion of an overpopulated luxury car market, along comes Audi with its quiet but highly significant challenge in walnut, leather and velvet V-8 power.

Stylistically, here is a flagship of handsome looks falling somewhere between dispassionate and dignified--without resorting to body badges, numerics or nomenclature to brag of its muscle and punch.

Technologically, the car has been designed as a masterpiece of safety engineering with driver and passenger protection concentrated where it belongs--in suspension, transmission and braking. And with air bags, a unique crash-retracting steering wheel and impact-tensioning seat belts as klutz-proof backup.

Sticker Shock

Financially .. . well, here's a sticker that goes beyond shock to a trauma some might associate with stun guns.

The Audi V-8's base price is $47,450. With gas guzzler taxes, freight, a pearl-white paint option, sales tax, registration and assorted startup fees, you'll be driving out the showroom door lighter by $50,000.

At that price, the Audi V-8 costs considerably less than its competing German colleagues, the BMW 735i or Mercedes 420. But it's also infinitely more than you'll pay for the rookie Lexus. Or the emergent Infiniti.

Yet, claimed Audi spokesman Larry Brown, these merely are very good cars. The Audi V-8, he explained, is "a truly unique car, an engineering statement reflecting the expertise of Audi . . . also the world's only V-8 with a permanently engaged all-wheel Quattro drive system and a programmable transmission."

Audi's all-wheel drive package is now the third-generation system of Quattro motoring and one that John Phillips III, writing in a recent issue of Car& Driver, described as delivering "remarkable stability in atrocious conditions."

Consider the atrocities to be snow, wet gravel, washboard curves, deeply puddled corners or the oil-water emulsion that is the surface of any Southern California freeway at the first whisper of autumn rain.

With Audi's Quattro system, should one wheel begin to slip, a central differential automatically reassigns engine power to the wheels with a better grip on the road surface. In an instant, if slick conditions dictate, the Audi can become 100% front-wheel drive or rear-wheel drive or any percentage in between. At the same time, a second mechanical instinct called a Torsen differential plays with the rear wheels, juggling torque from side to side and transferring power from slipping wheel to gripping wheel in microseconds.

Anti-Lock Brakes

Now add anti-lock brakes (ABS) and you have a handling system providing optimum traction and braking on any surface except one--and we must presume that not too many people commute to work across frozen lakes.

To make the point of Quattro plus ABS, Audi likes to put reviewers in a controlled environment and through evil paces that disclaimers on television commercials say should only be attempted by professional drivers.

We were taken to Riverside Raceway. Cones formed a single lane of asphalt on the back straight. Then the entire area was hosed to sopping and the games began.

The wet lane was entered at 40 m.p.h. In mid-gullywasher, brakes were stomped and held hard as steering was shifted violently to the left.

The car, by all the rules of inertia and dynamics, should have plowed ahead, wheels and steering locked in a collision-bound understeer.

In the Audi Quattro, quick turns were made, direction and control were maintained and the panic stops completed with neither chirp nor slither from any wheel.

Granted, we're discussing worst scenarios under extreme conditions. The motorists' daily lot usually is beneath clear skies on dry roads and at a peaceful pace. So, all things being equal, all-w eel drive with ABS under standard conditions offers no more advantage than two-wheel drive.

Unfortunately, few things remain equal.

Personal Protection Plan

So one might view the Quattro handling package as security against rare emergencies and a one-time personal protection plan right in there with flight insurance, burglar alarms, belt and suspenders.

Safety, in fact, has become something of a passion with Audi.

It could well be rooted in those dreadful years when the company was crucified for a series of accidents, some fatal, involving unintended acceleration of Audi 5000s with automatic transmission.

Critics maintained it was an engineering flaw. Lawsuits flew.

In truth, the National Highway Transportation Safety Administration eventually reported, the problem was brain fade among drivers whose misplaced feet hit the gas pedal instead of the brake. Yet the stigma lingers.

As a direct result, all Audis now come equipped with automatic gearshift locks that disengage from park only when a driver's foot is on the brake.

Safety Conscious

In continuation of such safety consciousness, the Audi V-8 features a unique steering wheel that, in the event of a frontal impact, snaps down and telescopes beneath the dashboard. It allows for deployment of a larger air bag and creates greater distance between steering wheel and driver's chest.

The visuals of the four-door Audi V-8 are quite conservative save for a splash of splendid style at the front end. Here, a slender, louvered trapezoid grille maintains a perfect frontal flow into rectangular headlights (with very European wipers) and fog lights.

In keeping with the trend to market luxury cars with little in the way of options save a choice between leathers, the Audi V-8 is a clean match for the competition. It comes with a six-speaker Bose sound system that could handle pregame announcements at Dodger Stadium; a hands-free cellular phone; central door locking; sunroof; cruise control and eight-position seats with multiple memories; leather upholstery and heating elements for anything that could mist or chill, including de-icers in the door locks.

Most curiously for a car that costs more than Zsa Zsa Gabor's trial, the Audi V-8 is not equipped with an internal trunk latch release. Nor is there a toggle to flip up the gas cap from inside the car.

Other nickel-and-dime problems of this $50,000 investment include a stubby windshield wiper stalk that blocks sight and fingers reaching for the ignition switch; power seat controls that for any of us with hands larger than koala paws must be adjusted with the driver's door open; and, in keeping with Teutonic eccentricity, a radio that, a la Volkswagen, continues to play with the ignition off.

At two tons, the Audi V-8 is a heavy car.

At 3.6 liters and 240 horsepower, it is somewhat underpowered when getting up and going anywhere.

But progression to the higher speeds is smooth, silent and rapid--and the four-speed automatic transmission can be driver-programmed for economy, manual or high-performance shifting.

By heft, heaviness, fit, finish and cultivated highway manners there is no mistaking this as anything but a thoroughbred performance sedan from Germany. When under load, however, it does start making delightful and quintessential American V-8 noises. But how does all of this compare to the Japanese rookies?

The price differential could become an issue when one realizes that a similar leather-and-walnut Lexus LS400, fully-optioned down to its cellular phone and a built-in CD player, still costs $5,000 less than an Audi V-8.

If buyers of luxury cars care about the cost of a gallon of gas, the Audi, with a city-highway average of 16-miles-per-gallon, is thirstier than either Infiniti and Lexus with their average 23-miles-per-gallon.

n the other hand, Audi's Japanese counterparts do not come with all-wheel drive and Quattro's traction juggling act.

All in all, a preference is much too close to call.

But you'll have s ome fun hours testing them.

1990 Audi V-8

The Good Total emphasis on safety via driver-side airbag, antilock braking, and all-wheel drive. Best sound system since Wurlitzer. Adignity that needs no performance badges.

The Bad Bottom-end performance. Blind, finger-mashing grope for power seat controls. No internal trunk release.

The Ugly An offset, slanting steering wheel.

Cost Base: $47,450. As tested: $48,985.

Engine V-8, 32 valves, 3.5 liters developing 240 horsepower.

Performance 0-60, as tested, 10 seconds. Top speed, as estimated by manufacturer, 145 m.p.h. Average fuel consumption, 16 m.p.g.

Curb Weight 4,000 pounds.