Germany: Land of schnitzel, Oktoberfest and the largest export market arena in the world. Surprisingly, lager and ale don't account for the whole $1.33 trillion that filters into the U.S. A chief amount of that total is provided by four of the globe's most noted and recognizable marquees and manufacturers: Porsche, Audi, Mercedes Benz, and Volkswagen. Some are pioneers in diesel technology, supporting a cleaner, environmentally friendly approach, while others commit themselves to a higher echelon of performance and grandiose style. But commonly, they all regard and reflect safety and dependability.

With European competitors from Spain, France, Italy, and Sweden alike, the German auto genus has substantially increased its already celebrated appeal since the turn of the millennium, capitalizing on a staked reputation for being more technically forward than domestics and less prone to defect than their Japanese Domestic Market (JDM) counterparts.

Although a $40,000 cap won't pocket you the keys of an Audi R8 or Mercedes SL 500, it is just enough to grant you access to a bevy of dignified street machines. Here are 10 German cars under $40,000 that are sure to demand the respect of the driver next to you at any stoplight.

10 - BMW 1 Series Coupe

MSRP: estimated at $30,000

With the code name E82, the BMW 1 Series is both the stealthiest and most technologically avant-garde of the compact luxury bracket. Slated for release in the spring of 2008, the 128i hopes to steadily chart forward where the legendary -- 40 years its senior -- BMW 2002 concept left off.

Upon reaching next year's second quarter, this handsome, two-door will be the sole vehicle in its class to offer RWD and Bimmer's newest ethos of "efficient dynamics," being the combination of a unique auto start/stop function, brake energy regeneration, electric power steering and water pump, and numerous drivetrain modifications. Not to mention the fact that the 1 Series will also be a mild hybrid. All of the aforementioned gadgets result in stellar performance, fuel economy and improved emissions. Dynamic Traction Control and 50/50 weight distribution launch the 3.0-liter nicely with a 230 horsepower, inline six-cylinder and 200 lb-ft of torque at your toes. Not bad at all for an German car under $40,000.

9 - Audi A4 3.2 FSI Quattro

MSRP: $36,400

When rummaging through dealer guides, the Audi A4 3.2-liter FSI Quattro is definitely a page to be bookmarked. A curb weight of 3,748 pounds doesn't slow this compact luxury AWD sedan down, and that's due to the 3.2-liter V6, a two-stage variable intake manifold and two-charge movement flaps, and a powertrain that expels 255 horsepower at 6,500 rpm and 243 lbs-ft of torque at 3,250 rpm. The engine incorporates a four-valve per cylinder layout as the five-valve design was incompatible with the direct-injection system. Labeled as a highway cruiser, the rigid chassis and near-flawless stasis provide a ride as smooth as the door panels. The demand controlled high/low pressure fuel system ushers in savings at the pump with an earnest EPA scale of 21.9 mpg in your urban environment. This compact executive car is often compared to its BMW classmates, but was smartly blueprinted to stand alone.

8 - Smart ForTwo Passion Cabriolet

MSRP: $16,590

With a wheelbase of just 71.3 inches, the petite Smart ForTwo Passion Cabriolet makes its way onto the countdown as undoubtedly the most compact of the compact models. This updated pocket rocket is a collaboration of Mercedes and Swatch and has gained a heavy following on its native continent. The cloth-top convertible was created with the intent of providing urban convenience where parking is limited and fuel economy is of the greatest necessity.

From a viewer's perspective, the Cabriolet may look to be about as safe as flirting with Mike Tyson's girlfriend, but it's actually quite the contrary. The sturdy steel Tridion skeleton is a key styling element that's left visible on the exterior. The protective cage engulfs the cabin and makes for a pronounced outline. The ForTwo is powered by a turbocharged, three-cylinder, 1.0-liter engine that generates a maximum 84 horsepower -- not quite a Ferrari, but you're saving the planet and looking pretty cool while you're doing it. A total of 23 specifications were changed to meet U.S. DOT compliance as the Smart ForTwo plans to move stateside in '08.

7 - Mercedes C300 Sedan

MSRP: $34,815

The corporate bigwigs at Mercedes recognize the mass commercial potential of the luxury sedan and have fashioned the C300 accordingly. While the name may be similar, don't mistake this German beauty for the Chrysler 300C. This entry-level Benz represents an effort to thwart the mechanical gremlins and engineering blunders it faced under the Chrysler regime. Last year's fiscal statistics reflect that six out of 10 C-Class owners were first-time Mercedes buyers, and should ensure plenty of return business. The C300 underwent a makeover with a front end that resembles the brass ring S-Class and is four inches longer and 1.7 inches wider than its predecessor, boasting more passenger compartment room. Cog swapping is managed by a seven-speed automatic transmission, as the V6 generator spews 230 horsepower, with a 0-60 mph peak in the shallow 7.0 second range. With an estimated EPA rating in the low 20s for the city and high 20s on the open road the freshest C300 is a sure thing.

6 - Volkswagen GTI MkV

MSRP: $24,370

The VDub GTI MkV is every road racer's dream and every competitor's ambition. It gains most of its retail value in a DOHC 2.0-liter, turbocharged, inline four-cylinder engine with Fuel Stratified Injection or FSI (like the Audi) direct-injection technology. Sound sophisticated? Well it is. The 200 horsepower at the crank can be governed by either a six-speed manual or a six-speed DSG (Direct Shift Gearbox), which substantially minimizes shift lag to 8.0 milliseconds. Not only does this surpass all previously existing clutchless transmissions, but it was also enough to garner the GTI the title of Automobile of the Year from Automobile Magazine in December 2006. The most recent rendition of the Golf is weightless enough to maintain superb balance in the FWD chassis setup, giving it the toss-around feeling that defined the original GTI for most enthusiasts. Building on a lineage, and with the tagline, "Pre-tuned by German engineers," this GTI definitely hits its mark dead on.

5 - MINI Cooper S JCW Edition

MSRP: $39,990

The last time we saw the John Cooper Works (JCW) Special Edition MINI it was undergoing a gradual transformation. The JCW MINI began as a dealer-installed performance kit that featured tailored head cylinders, a new supercharger with a smaller drive pulley and a free-flowing cat-back exhaust system, tallying 200 horsepower flat. The self-manufactured, aftermarket trim was so well-received by the consumer public that they were outfitted on the assembly line for future models.

The former UK marquee, now overseen by BMW, has restored the JCW package back to its dealer-installed beginnings. The latest JCW package ameliorates the punchy short-sport by 17 horses, from the regular Cooper S' 172, with high-flow exhaust canisters, a new air filter and a stand-alone engine management system. Likened to the Porsche 911, the upgrade package lends the turbocharged 1.6-liter, four-cylinder an overboost control, enabling the motor to briefly stretch itself and produce a higher, full-throttle torque level of 199 lb-ft. So, don't be fooled by it's cute looks, this Cooper's got some serious grunt.

4 - BMW 328xi Coupe

MSRP: $37,100

The BMW 328xi Coupe is a compact executive car that flexes enough muscle to show why the 3 Series is the cash cow of the roster. Billed as the "ultimate driving machine," this sleek creation comes equipped for all weather conditions with an intelligent X-drive (AWD) system. The majority of the 328s prowess stems from its lightweight composite magnesium/aluminum engine block with Valvetronic technology motors capabilities, a 3.0-liter broad-band, straight-six powerplant that churns 230 horsepower like butter. The output is handled by a six-speed manual lever or a Steptronic automatic gearbox. Linearity is heavily tended to in terms of maneuvering, as the pilot is in complete control of the admirably responsive Bimmer. A distance sensing Active Cruise Control that slows the vehicle upon approaching traffic, adaptive Xenon headlamps, abundant storage capacity, wireless technology, run-flat tires, and an EPA scoring of 20 mpg in town and 28 mpg on the freeway round out the gauntlet of improvements for 2008 in this well-designed and well-engineered 3 Series.

3 - Audi A3 3.2 S-Line

MSRP: $34,915

The Audi A3 is the junior, domed-back, luxury ride of the small family car class. The S-Line shield means you get a 3.2-liter, DOHC, 24-valve, V6, good for 250 horsepower at 6,300 rpm and 236 lb-ft of torque at 2,800 rpm. In contrast to the abbreviated base A3 2.0T's turbocharged, four-cylinder engine, the S-Line provides a leap of 50 horsepower and 29 lb-ft of torque. The sticky Quattro AWD configuration gives a launch advantage from a standstill and comes as standard equipment, as does the six-speed Direct Shift Gearbox (DSG) semi-automatic transmission, with a manual mode and race-inspired paddle shifters. Tuned for a more athletic ride, MacPherson strut front suspension and a multi-link setup in the rear remain a constant of the 2.0 model. This S-Line also sports a rear spoiler as an addition of aerodynamic aesthetic. As to be expected of the Ingolstadt, Germany-centered brand under the Volkswagen umbrella, superior handling makes the A3 3.2 S-Line offering a true canyon carver.

2 - BMW Z4 Roadster 3.0

MSRP: $36,400

Also know as the E85 in two-seater trim, the BMW Z4 is a RWD sports car and the only roadster on the list -- and for good reason. Coinciding with the 5 and 7 Series, and in an attempt to show some manufacturer-shared DNA, Chris Bangle was recruited to head the design team. Often criticized for his bold and aggressive "flame surfacing" technique, the longer-nosed Z4 is no exception. This roadster shares a strut-type front suspension with the preceding Z3, but the rear suspension, however, no longer derived from the E30, is markedly noticeable and utilizes a more progressive multi-link suspension in lieu of the semi-trailing arm. The polarizing convertible's drivetrain has sporting proportions, with a 3.0-liter inline six-cylinder that results in 215 horsepower at 6,250 rpm with 185 lbs-ft of torque at 2,750 rpm. The six-speed automatic maintains a redline longer than expected and a low center of gravity relays plenty of responsive ground sensation back to the cockpit. This roadster is a sheer pleasure to drive, no matter what the road or weather conditions.

1 - Volkswagen R32

MSRP: $32,990

The king of the hill on this outing just happens to be yet another sibling of the world's No. 3 top seller, and Volkswagens personal best; the Golf GTI. Originally released in Europe in September of 2005, the R32 set out to tip the performance scale in VDubs favor. Three years later, a doctored inlet-manifold lends a bonus 10 horsepower to the 3.2-liter, VR6 hardware, upping the total to 250 horsepower at 6,300 rpm. While the new R32 has about 88 pounds of weight on last years model, the DSG version hauls the hatchback from 0-60 mph in 6.2 seconds, a 0.1 second shave off its manual-ancestors time. The popular four-motion AWD is also available in standard along with 18-inch Zolder alloy wheels. Blue-stained brake calipers, measuring 13.6" in the front and 12.2" at the rear distinguish the R32 from the remainder of the GTI MkVs. It has been compared to the AWD Mitsubishi Lancer Evolution and even the Subaru STI, but VW's Director of Marketing David Goggins has a strategy to make the R32 popular without comparison. Rather than a rally car, "[VW] think[s] of it as more of a grand touring car, really." And we couldn't agree more.


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