The girl at the petrol station smiled broadly - and, I have to say, rather attractively - at me as she handed back my card, and maintained eye contact for far longer than I imagine she did with most customers. "Nice car!" she said. "Thank you," I said, taking the card, before falling into the trap of explaining that the BMW wasn't mine and would have to go back soon. I really need to stop doing that.As I was walking back to the car I couldn't help agreeing with her. Every time I looked at the Z4 I couldn't help admiring it. It really does look very smart indeed, and as explained in our launch report this is one of the ways in which it holds its predecessor's head below the water line and keeps it there until the bubbles stop - the others being that it is much roomier, much more comfortable and much better to drive.It also has a sillier name. This particular car is called sDrive35i, which means that it has a 306bhp three-litre twin-turbo petrol engine, as opposed to the 258bhp 3.0 non-turbo of the sDrive30i and the 204bhp 2.5 of the sDrive23i. Once you've stopped laughing about those daft badges, it quickly becomes apparent that the 23i is by far the most sensible choice, since it's cheaper and more economical and is as fast as you really need a Z4 to be.The 35i is very appealing, though, partly because it sounds great. A friend to whom I gave a lift loved this aspect of the car above all others, and could scarcely be consoled about the sorry truth that it's not within his budget.He also liked the acceleration and the handling, but not as much as I do; the Z4 can very easily cope with 306bhp, it is very secure in corners, and although you're often aware that there is a bulky engine influencing the behaviour of a small car, the effect is mild and the annoyance minor.There's no doubting the performance of the sDrive35i, but I'm pleased to be able to report that it can also be quite economical. I covered a lot of motorway miles in this car and, according to the trip computer, averaged about 36mpg, which is considerably above the official combined figure. Trip computers are not always to be trusted, of course, and I wasn't going very quickly, but I was still impressed by how far I could go on a tankful.The standard gearbox for all Z4s is a six-speed manual, but they each have an automatic option. In the case of the 23i and 30i it's a conventional unit, but the 35i gets a seven-speed dual-clutch affair which marginally improves both the performance and the economy (though admittedly not by much).It's called DCT, and apart from being slightly cumbersome when you're pulling away slowly from rest, as these things usually are, it's as good as any other system on the market. Manual changes can be made using very odd levers on the steering wheel, which take a lot less getting used to than it seems they will at first, but in everyday driving it seems appropriate to leave it in automatic mode.DCT adds £1810 to the price of the car, but bearing in mind what a small proportion of the total cost that is, it's probably worth it. BMW reckons that 70% of customers will feel the same way.If it seems odd to be talking about driving economically and using an automatic gearchange function in what appears to be a sports car, bear in mind that the Z4 isn't actually all that sporty. It can be hustled along, but it doesn't seem to invite that sort of thing, and it feels more like what used to be described in the old days as a Grand Tourer. It was certainly more pleasant to live in during hour after hour of motorway driving than a casual onlooker might expect.Also worth noting is the fact that this Z4 has a powered folding metal roof. The previous model had a choice of a solid roof or a fabric one, but BMW was assured by several potential customers that they would not give the car a second thought unless this was changed.Folding the roof reduces luggage capacity from 310 to 180 litres, which is fine if there's only one of you on board but could be more stressful for two.The iDrive system has also changed over the years, after much moaning about its complexity when it was first introduced in the 7-Series. It's more manageable now, though I did find myself grumbling about the satellite navigation function.Mostly, it's great, but it won't let you input postcodes (or if it will I haven't found how to do this yet) and it gives you warning of junctions and roundabouts quite far in advance but without telling you what you're supposed to do when you get there. This information is finally revealed with about 350 yards to go, which can be awkward if you've wrongly guessed what lane you should be in. Engine 2979 cc, 6 cylinders Power 306 bhp @5800 rpm Torque 295 ib/ft @1300 rpm Transmission 7 speed semi-auto Fuel/CO2 31.4 mpg / 210 g/km Acceleration 0-62mph: 5.1sec Top speed 155 mph Price From £39960.00 approx Release date 09/05/2009