Audi Promises to Sell A3 Sportback in North America by Next May

BMW Wont Sell 5-Door 1-Series in North America but Will Bring Other Models

While Volkswagen has been targeting BMW and Audi customers with its new Touareg and Phaeton models, BMW and Audi are attempting to go down market with the introduction of the new 1-Series and A3 Sportback respectively.

Of course, Audi has long been in this market with its European-market A3 but the new sport wagon is a new departure, important considering BMW will feature a 5-door version of its smallest entry.

Audi AG recently stated that it plans to produce 75,000 A3 Sportbacks per year, according to a spokesman for the Ingolstadt, Germany carmaker.

As before, the compact A3 shares general architecture with the popular Volkswagen Golf. Compared to the outgoing A3, however, the new Sportback is slightly longer while the cars most potent engine makes up to 250 horsepower. As is usual among Audis, the Sportback will also make quattro all-wheel drive an option, with front-wheel drive coming standard.

BMW has not announced any engine upgrades for the rear-drive 1-Series, incidentally the only rear-wheel drive compact currently being sold anywhere in the world, but M versions of the next-in-line 2-Series coupe and convertible, built off of the same architecture as the 1-Series, are expected. BMW has not offered any clues as to an all-wheel drive "Xi" option either, but the company does have the technology to produce it if the components fit and the market demands.

Audis spokesman stated that the automaker plans an annual global output of approximately 150,000 A3s, of which the new A3 Sportback model will comprise about 50 percent.

"The plan is, of course, flexible, depending on demand," Chairman Martin Winterkorn stated to Reuters news agency.

In comparison BMW plans sales of at least 100,000 1-Series in 2005, targeting a new group record.

During the premiere presentation of its new 5-door model, a sedan is also expected, Michael Ganal, BMWs head of sales and marketing, restated BMWs goal of record group sales.

According to a Reuters report, when he was asked about the companys growth continuing into the following year, he commented, "Thats how it should be."

BMW group delivered 1.1 million units in 2003, and plans to increase this number to 1.4 million units by 2008.

While Ganal appeared bullish about future 1-Series prospects, with the set to hit European showrooms on September 18th, he made sure to mention that his company is not expecting to sell 50,000 units for the remainder of 2004 despite their 2005 predictions of 100,000 units delivered. Ganal didnt expand on his reasoning, but its safe to expect the usual ramp up time with regards to market awareness as well as slightly slower initial production capacity.

Other premium marques targeting the BMW 1-Series and Audi Sportback are Alfa Romeos 147 and the Mercedes-Benz A-Class, among others. To some extent Volkswagens own Golf GTI targets this segment in premium trim, while Lancias Ypsilon also offers luxurious amenities in an even more compact package. The compact premium segment is said to make up for approximately 6 percent of the global car market.

Alfa Romeo and Lancia aside, when can Americans expect the BMW 1-Series and Audi A3? BMW is only saying it will offer the 1-Series in the U.S. within the next 5-years, but has stated that it wont be coming in its current 5-door guise and will feature a 6-cylinder engine only. While some analysts consider this shortsighted, given the current state of fuel prices and the automakers storied history of performance-oriented 4-cylinder compacts (i.e. BMWs 2002tii and first generation M3), the company wants to be careful not to dilute its brand image in a market that considers the blue and white roundel to be in the premium category only - in Europe, the price gap between a 3-Series Compact (hatchback) and Golf is not as wide as within North America. Whether BMW chooses to offer a 4-door 1-Series when the model finally arrives in the U.S., or a 2-door 2-Series coupe and/or convertible, is difficult to speculate.

In Canada, however, it is possible the 4- and 5-door models will be available, even with 4-cylinder power. While no official word has been stated, the possibility also hasnt been denied. Canadas unique market, featuring premium compact vehicles such as the Acura 1.7 EL (a restyled Honda Civic with premium features) that is sold exclusively in the Canadian market and the Jaguar X-Type wagon, also not available in the U.S., mean that opportunities for the BMW 1-Series 4- and 5-door models and Audi A3 to succeed are much higher. Mercedes-Benz smart brand, expected to enter the U.S. in 2006 with a new 4-door sedan and 5-door micro-SUV, begins to sell its fortwo 2-seat microcar this fall across Canada, just another sign that the Canadian market is very different than the U.S. The differences are attributed to a lower expendable average income, higher prices for fuel, and a general acceptance for smaller vehicles.

The benefit to automakers is that the Canadian market is small enough to not tax current production facilities of a given model, but rather take up overflow and in fact make plants more productive. Canada also serves as a reasonably accurate test-bed for potential American introductions. While the market is definitely different than that in the U.S., it is the closest to it than any other.

Introduction of Audis A3 Sportback to America is more definite than BMWs 1-Series, being that Volkswagen Groups Auburn Hills, Michigan head office recently announced the compact model will arrive in North American showrooms in May, 2005 as a 2006 model.

Audi said its A3 Sportback is to feature a new 2.0-liter turbocharged FSI 4-cylinder engine making up to 200 horsepower. The A3 2.0T FSI, sporting a 6-speed manual gearbox, will be capable of charging to 60 mph from standstill in about 7.0 seconds, and achieve a terminal speed of 130 mph. The brands stellar DSG sequential-manual/automatic will also be available.