Audi S1 Quattro Sportback confirmed : price tag of “about $50K” for tiny turbo terror

The new Audi S1 Quattro's power figures are big for such a tiny car - under its bonnet is a 2.0-litre turbocharged four-cylinder engine producing 170kW and 370Nm - more than a Volkswagen Golf GTI. The result is a blistering 0-100km/h sprint claim of just 5.8 seconds, while fuel use is claimed at 7.1 litres per 100 kilometres.

The car sends its power to all four wheels via a six-speed manual gearbox, and there's no dual-clutch automatic option on offer, despite international reports and rumours to the contrary. The all-wheel-drive system features a multi-plate clutch at the rear axle, with an electronic differential lock and a stability control-based torque vectoring function.

Audi Australia has confirmed the new model will arrive locally in the third quarter of 2014, with a price tag of "about $50,000" expected for the five-door Sportback model. A three-door version will be sold in Europe, but that car will not be offered locally.

Audi Australia general manager of corporate communications Anna Burgdorf told CarAdvice that the new model - which is expected to be priced $10,000 below the larger $59,900 S3, and almost double the price of the current city car hot-hatch benchmark, the Ford Fiesta ST - will justify its lofty price tag.

"There'll be roughly a $10,000 gap between S1 and S3," she said. "I think that's a pretty reasonable line to draw in the sand.

"It will be highly specified, it will be Quattro, unlike any other A1 - so I think, in fact, people looking for a small hot-hatch it's relatively well priced. It probably offers more than its closest competitor," she said, which we took to be the Mini Cooper JCW.

However, Burgdorf didn't rule out a price cut for A1 models if key rivals - such as the soon-to-arrive new Mini Cooper range - see dramatic price drops. Currently, Mini sells a more basic model called the Ray from $25,600, but the brand is tipped to drop prices for the better equipped Cooper model, which starts at $31,650,  to well below the $30,000 mark when the new car arrives in March.

"In general there isn't a rule or a plan to reduce A1 prices," Burgdorf said.  "But having said that, the way any car company benchmarks its prices is against its closest competitors. We exist in the market to sell cars, to support our dealers to make money, and in general to contribute the profits that we're expected to to the factory.

"Does that mean we need to follow what our competitors are doing and potentially react if there are significant price reductions in the market? We have to be competitive is the answer. Is it a general plan? No, we think the A1 is priced well for what you get," Burgdorf said.

"For the level of quality, the level of technology, the level of driver assistance systems that you're able to get in a car like the A1, it's priced well," she said.

"We don't pretend to be a mass market brand - we're a premium brand, we sell a premium product at a premium price. Will we remain competitive in the Australian market? Yes, yes we will," she said.