The third generation of the Discovery was launched in 2004 and the much-awaited upgrade was kind of a disappointment.
The LR3 designation was for the U.S. market, continuing the LR2 name, which was assigned to the Land Rover Freelander 2. While the first two generations had live axles, the LR3 was introduced with all-wheel independent air-suspension. That allowed the vehicle to increase or decrease its ground clearance but raised doubts about its durability. The second generation of the Land Rover Discovery was kind of a disappointment due to reliability issues.

Under Ford ownership, this new generation came with special new bodywork, a mix between a monocoque body and a body-on-frame. The result was a heavier vehicle then a unibody and not as stiff as a chassis-based vehicle.

But the biggest enhancement is the introduction of the Terrain Response system, which set all the car’s systems (gear, transfer ratio, and differentials) according to the nature of the terrain. It was able to send the most torque to the wheels that have the highest traction and it wasn’t just a marketing slogan. It really worked.

The LR3 had a V8 AJ41 engine coupled as standard with a six-speed automatic and a two-speed transfer case. A computer-controlled progressively locking central differential ensured traction was retained in tough conditions. A similar differential was available on the rear axle to aid traction.