This is an artist's rendering of what the upcoming Audi Q3 may look like.

The Q3 is an SUV, previously spied here, due for a debut in 2011. It is Audi's answer to the BMW X1, a compact SUV released late last year which is now Europe's biggest selling SUV overall.

But Audi is not far behind, since its mid-sized Q5 SUV, a direct competitor to the BMW X3, fell just 407 units shy of the X1 in sales figures for the first six-months of 2010 - 44,067 X1 units sold compared to 43,660 units of the Q5. A successful Q3 model could help Audi's total SUV lineup sales considerably.

The Q3 will be built at a SEAT plant in Martorell, Spain, with a capacity to make 80,000 units a year of the model. VW Group has invested €300 million in the development of the Q3. The compact SUV will likely be fitted with an array of Audi/VW Group engines including the 2.0 liter TFSI and the 2.0 liter TDI diesels.

Competition may be also heating up, though, given the success of the X1. Range Rover already has the Evoque and other premium brands, including Infiniti, Mercedes-Benz and Saab, are already set to get into this new premium compact SUV segment too.

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