Initially, North American customers will receive only one version of the A3, the front-wheel-drive model powered by Audi's turbocharged inline-four. Later in the model year, Audi will add a 3.2-liter V6-powered Quattro model, and following that, an “S” version with even greater performance will come stateside.

Audi has high hopes for the 2006 A3, which has been sold in Europe since 1996 and entered its second generation in 2003. Until now, Audi has concentrated on selling its sedans and station wagons here. But given recent entrants such as the Saab 9-2X and Volvo V50, Audi clearly feels that the small car market in the U.S. is worth pursuing – to the tune of 10,000 units for the 2006 model year. And while it's true that Americans prefer cars with trunks, they also show a consistent thirst for vehicles with luxury nameplates, so Audi is not concerned about the A3’s hatchback design.

This new-to-America A3 should capture enough of the market here to preserve the United States' status as Audi's top export destination. In the premium compact segment, this attractive hatchback should thrive based on its luxury nameplate, safety features, and performance capabilities. Just take it for a ride on Mulholland Highway – you’ll see.