Spied: Audi A1 mule

With rising gas prices and stricter proposed emissions regulations, both in the U.S. and abroad, automakers are looking to smaller vehicles to increase mileage and reduce CO2 emissions. Not only is this true for mainstream automakers but of luxury brands too. In Europe, Mercedes-Benz offers the A and B-class while BMW uses its Mini brand as its global small-car division. And, thanks to a new round of spy photos, it looks as though Audi will soon join the small-car segment.

Spy photographers spotted a mule for the upcoming Mini-fighting Audi A1 while out testing in Germany.  Although the mule is covered in the body of a Volkswagen Polo, it is underpinned by the mechanics and drivetrain of the Audi A1 (the "IN" on the license plate stands for Ingolstadt, which every test Audi wears). Although seen in a three-door hatchback body style, the A1 will be available as a five-door hatchback, two-door coupe and as a convertible.

Engine choices are expected to be available in gasoline FSI and diesel TDI guises. A more powerful TSI engine will bow later. Transmission options will include a standard six-speed manual and an available seven-speed DGS gearbox. A turbo-charged, all-wheel drive S1 remains a possibility.

According to our sources, the A1 should debut at the 2009 Frankfurt Motor Show with the convertible version following in 2010. Audi has reportedly set a sales target between 100,000 and 120,000 units annually. More photos at Left Lane News.