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To become a true competitor with German luxury brands BMW and Mercedes-Benz, "we will go into niches," he adds.

Audi's product range consists of the A3, A4, A6 and A8. It lacks SUVs and sport coupes.

Audi is rolling out the redesigned A4 in the United States. It will have at least two more derivatives than the previous generation, Winterkorn says. The last generation had three body styles: sedan, station wagon and convertible.

One of the new A4 variants will be a small SUV, the Q5, Winterkorn says. Audi is developing the vehicle primarily for sale in Europe. It is expected on the market in about three years.

Audi aims a larger SUV, the Q7, at the United States. The Q7 is due next year.

The premium compact SUV market is beginning to heat up. BMW is riding high with its X3, but both Mercedes-Benz and Audi aren’t planning on allowing BMW to roam free. Even Land Rover who created the segment are planning a new Freelander next year, with quality on par with the Germans.



Audi’s X3 fighter is the forthcoming Q5. Due in 2007, the 5 seater compact SUV will be based of the current A4 platform and feature the Torsen AWD system. The Quattro AWD system is set up to provide a 40/60 split for the front/rear torque distribution with 100% being transferred to any wheel when loss of traction occurs.



Styling is to follow closely to that of the 2006 Audi Q7 due to be unveiled at the 2005 Frankfurt Auto show. The distinctive shield grill dawns the front of the car with Q7 lower facia, and sleek like headlights. The rear design is reminiscent of both the A3 Sportback and recently facelifted A4 wagon. Unlike its bigger brother, the Q5 will only have room for 5. The Q5 forgoes with off-roading capability but will feature air suspension and hill decent control.



Engines likely will include the 2.0-litre FSI and 3.2-litre (or 3.6-litre FSI) V6, with the 4.2-litre V8 being fitted into the S version. Diesel power will be the main selling force in Europe with the 2.0 TDI and 3.0-litre V6 TDI both being offered.



Prices are expected to start from roughly $35,000 for a base model in the US and around 30,000 Euros in Europe. Unveiling is planned either at Geneva 2007 or fall 2007. Americans sales start in early 2008.

PHOENIX, Arizona, USA – Audi will add a small premium SUV called the Q5 by 2008.

Ulrich Hackenberg, Audi’s head of concept development, confirmed a five-seat Q5 is in Audi’s immediate plans.“I think we need a Q5 and we will have it,” Hackenberg said at a press event here.

Hackenberg said the Q5 will be positioned against the BMW X3 premium SUV and will be sold in both Europe and the US. It likely will be based on the A4 sedan.

Audi exhibited the Steppenwolf, a small, three-door SUV concept, at the Paris auto show in 2000. That vehicle featured all-wheel drive and was powered by a 225hp, 3.2-liter V-6 engine.

Its first, the Q7, was introduced last autumn. The Q7 shares a platform with the Volkswagen Touareg and Porsche Cayenne and is built in Bratislava, Slovakia.

Audi is adding new models in a product offensive aimed at doubling its annual global sales to 1.5 million units by 2015. Last year, Audi sold 829,100 vehicles globally, up from 779,441 units in 2004.

Audi is developing a new compact SUV to take a place below the Q7 in the company's model range. Dubbed Q5, the newcomer is going to be a direct competitor against BMW's X3 and the Acura RDX. The Q5 rides on a platform featuring elements from the next A4 and A6. In order to be able to use V-8 engines, which are considered essential for the U.S. market, the engines in this SUV will be mounted lengthwise, not transversely.

Our computer illustration of the Q5 is shown here with original photos of the prototype captured during tests at the Nürburgring. The Q5 is expected to go on sale early in 2008.

FRANKFURT -- Audi AG has decided to build the Q5, a smaller SUV that will join the Q7 in its lineup. The Q5 will be built in Germany beginning in 2008.

Audi will invest $383 million for production of the Q5, which will be sold in the United States. The timing has not been released.

Audi will finally develop their Steppenwolf concept into a production vehicle, but won’t be using the A3’s chassis and body design. Instead, it is going to use a refined quattro all-wheel-drive system and powerful petrol engines as well as TDIs built around a redesigned A4 chassis. The car is likely to hit the roads in 2007 and will be amongst the first compact SUVs to be at the dealers, by then badged the Q5. While the massive bumpers, the sump guard and the chrome door sill protections can be regarded as pure show, the greater ground clearance in combination with powerful engines and an extended towing capacity will certainly appeal young buyers with sporty ambitions.

Volkswagen AG unit Audi AG is building a plant in Changchun, northern China, to assemble its new compact SUV, the Q5, Sueddeutsche Zeitung reported, citing unspecified China-based sources.