Audi has been caught testing its all-new baby hot hatch, the Audi S1. The model will be the cheapest and smallest ‘S’ model in Audi’s history. It will be powered 136kW engine and come equipped with all-wheel drive, a first for its class.

Although it may look like an ordinary Audi A1, the company has gone to great lengths to conceal what lies beneath. Wearing a normal A1 body it takes a keen spotter to pick up the subtle clues that this is not your average A1, such as the multi-piston front brake calipers.

From the front you can see the wheels are offset to provide a slightly wider stance than the normal Audi A1. The production S1 will be equipped with an enhanced suspension system which will lower the car to some degree as well, this test mule appears to have smaller gaps in between the tyres and guards compared with a normal A1.

It’s not until you take a look at the rear that clues become more concrete evidence. The exhaust outlets in particular on this mule are much bigger than a conventional A1, providing an indication of the high-performance engine under the hood.

Specific details haven’t been officially announced yet, but international reports say the Audi S1 will be fitted with the 1.4-litre turbocharged engine from the Volkswagen Polo GTI, producing 136kW of power. This will put it in the same league as the MINI Cooper S and the Citroen DS3 DSport.

Since it is a sports Audi, it will also feature the company’s renowned quattro all-wheel drive system, putting it ahead of the class in terms of drivetrain layouts (all rivals are front-wheel drive). Acceleration from 0-100km/h could be dealt with in the low six-second range.

The Audi S1 is expected to be unveiled sometime towards the end of this year and then go on sale in 2012.