Audi moves TT for R4

While it will be based on 2013's all-new A3, Audi will soften the TT and position it at least 10 percent higher to give the mid-engined baby sports car room to move.

That means the baby sports car can't possibly arrive before 2014 and could possibly be even later.

Despite rumours in Germany that it had killed off the ambitious small sports car project it will share with both Volkswagen and Porsche, sources insist Audi design boss, Wolfgang Egger is already working on the production version of the R4.

"We have to move the TT upwards slightly to push the R4 in slightly below where the TT sits today," one source insisted.

"It has definitely not been cancelled. It's still on. The timing is difficult, though, because there are a lot of things we have to do first to let it work.

"It will still be shared with Porsche and VW and that's the current plan, but it will need to wait, for us, until we move the TT's positioning or we don't have the room in the brand for it."

The R4, which made its debut as the R4 e-tron at last year's Detroit Motor Show, will share the clever MRS (Mid, Rear, Sports) architecture with Volkswagen's MX-5-chasing Bluesport and Porsche's sub-Cayman baby car.

Likely to be powered by a version of Audi's much-lauded TFSI 2.0-litre, turbo-charged, direct-injection four cylinder mated to a DSG gearbox, the R4 will also be capable of the hybrid and electric power Audi sees as its future.

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