Audi A1 aims to beat Mini in its first year

The Audi A1 may be small but there's a lot riding on its petite frame. Indeed, the German prestige brand expects to outsell its main rival, the MINI Cooper hatch, within its first 12 months on sale.

And it is taking the fight to the streets, with mobile A1 showrooms set to appear in St Kilda and Southern Cross Station in Melbourne, and Darling Harbour and Bondi in Sydney over the next fortnight.

At the launch of the A1 in Melbourne overnight, the boss of Audi Australia, Uwe Hagen, told the Carsales Network that the company expected to sell in excess of 2000 cars in its first full year on sale.

MINI has customarily sold about 2000 Coopers a year and is on track to eclipse that figure in 2010. But the A1 could put a dent on the dominance of the BMW-owned small car icon.

"We don't target the MINI specifically," Hagen said. "The rivals for the A1 are all types of cars. People are downsizing and coming from completely different vehicles, not only small cars."

When asked how many A1 Audi dealers expected to sell, Hagen said: "For sure I think 2000 sales is not a problem. If this is more than MINI then so be it, but that is not the target."

Hagen said that the premium small car market was growing so rapidly that there was room for everyone.

"I think we can all exist. The market is really expanding – so far this year it is up 33 per cent."

He said the A1 was a "new entry gate" to the Audi brand but would also help give the company another sales surge.

In the past three years, Audi sales have grown by 30 per cent, then 20 per cent, waning to a forecast 10 per cent this year.

"If we do an extra 2000 cars with the A1, as well as get some improvement from our other models, we should again get in the high teens, maybe 18 per cent growth in 2011," Hagen opined.

Audi believes between 80 and 90 per cent of A1 owners will be new to the Audi brand.

"We hope to have them come to Audi for the A1 and then stay with us," he said.

The Audi A1 starts from $29,990 for a 1.4-litre turbo four-cylinder petrol model with six-speed manual, ranging to the top grade model with a seven-speed twin clutch automated transmission at $35,000 (both prices exclude registration and dealer charges).

To appeal to "young urban professionals", Audi has introduced a finance package that bundles lease repayments and scheduled servicing for $169 per week. The interest rate is locked at 9 per cent and the terms vary from 36 to 48 months, depending on the model.

The A1 is reasonably well equipped but there is at least one glaring oversight. Wireless Bluetooth phone connection, standard on many cars that are less than half the price of the littlest Audi, is part of an option pack that costs between $1450 and $1800 depending on the model.

A 1.6-litre turbodiesel will be introduced mid-2011, and a five door variant will follow in 2012. A cabrio is not yet confirmed but could arrive in 2013.

The much anticipated all-wheel-drive, high performance S1 has been ruled out as it would be too expensive to modify the rear underbody to fit the all-wheel-drive system. Instead the S1 will have to wait until the next all-new model is developed for release in five years' time.

The Audi A1 shares its core underbody with the latest Volkswagen Polo – the reigning World Car of the Year and already a winner of a number of awards in Australia in 2010. Audi, however, is at pains to point out it has made significant engineering changes to improve quality, refinement and dynamics.

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