Price premium for Audi A3 sedan

Audi's first A3 sedan will be priced higher than the five-door hatchback upon which it’s based when it goes on sale in Australia in January, even though it costs less to manufacture.

The new five-door A3 Sportback went on sale last month priced from $35,600 -- $5600 less than the model it replaces -- matching the opening price of Mercedes-Benz’s new A-Class hatch.

As in Europe, however, Audi’s first A3 sedan will be positioned as a sportier, more ‘style driven’ alternative to the five-door, with prices expected to start closer to $40,000 – about $3000 more than the hatch.

This is despite the fact the A3 sedan is built exclusively in Hungary for all countries outside China, making it cheaper to produce than both the German-built A3 Sportback and A3 three-door, which won’t be sold here due to slow sales of the previous model and the introduction of the smaller A1 hatch.

The A3 sedan’s higher price positioning is also at odds with the mainstream small car segment, in which sedan and hatchback versions of most models usually cost the same.

Although Audi Australia has confirmed it will follow the premium pricing strategy seen in other markets for the A3 sedan, it is yet to confirm final pricing, which could be influenced by the price positioning of its chief rival, the Mercedes-Benz CLA-Class sedan due on sale here around August.

About 1.9 million engines were produced for both Audi and Volkswagen models at the Gyor plant in western Hungary, making it Audi’s largest engine plant.

The Gyor facility also assembles the Audi TT sports car from bodies in white, but the A3 sedan will be the first vehicle manufactured from the ground up at the sprawling Hungarian factory.

Around 2700 workers are employed specifically to produce the A3 sedan at a new plant at Gyor, bringing the total number of staff at the site to some 9000.

Apart from equipment levels, Audi says the A3 sedans built in China are identical to those built in Hungary, but the Chinese factory will produce only for domestic consumption, which represents roughly about a third of global volume.

Audi remains cagey about the exact production capacity of Gyor, but says it will produce at least 100,000 cars there annually, doubling the A3’s production volume.

The US is expected to account for half of all A3 sedans built in Hungary, with the other half split across the rest of the world.

Audi said there are a range of factors why it chose to produce the A3 sedan at Gyor, including lower labour costs, high education levels and generous government incentives.

However, it fears that if Hungary joins the Eurozone manufacturing will become more expensive due to increasing pay rates across western Europe.

It says there is potential to manufacture other model at Gyor, but not at the expense of its German facilities.

“It’s not a matter of moving out of Germany,” said Audi Product/Technology Communications Manager, Josef Schlossmacher. “Audi wants to grow. That means you need more factories. That’s why we’re starting in Mexico next year and a second plant in China too.

“Last year we sold 1.4 million cars. The A3 is our first A-segment sedan, so the (A3) volume will double.”

The A3 sedan line-up will mirror that of the Sportback, with the exception of the 1.6-litre turbo-diesel variant, which remains under consideration for the four-door.

That means all A3 sedans will be powered by turbocharged direct-injection four-cylinder engines, all matched with six- and seven-speed dual-clutch automatic transmissions.

As in the A3 Sportback, the three-engine, two-transmission, two equipment A3 sedan line-up will open with the 1.4 TFSI Attraction and close at around $45,000 (about $10,000 less than the equivalent A4 sedan) for both the more powerful and better equipped Ambition-spec 1.8 TFSI and 2.0 TDI models.

On top of that the 1.8 TFSI will become available in quattro all-wheel drive guise to crown the front-drive A3 sedan line-up, although Audi Australia is yet to decide if it will introduce the standard 1.4 TFSI or the more powerful and efficient ‘cylinder on demand’ version that will join the A3 Sportback range in October -- or both.

All A3 engines will come standard with a dual-clutch S tronic transmission with steering wheel paddle shifters and the option of a six-speed manual transmission for the same price.

Also standard across the range will be leather-appointed seats, rear parking sensors, dual-zone climate control, auto headlights and wipers, front seat height adjustment, Bluetooth phone/audio, Audi Music Interface with CD and SD card input, and a new multi-media interface (MMI) via which a plethora of vehicle systems can be controlled by a large central rotary dial and a 5.8-inch colour monitor that pops up from the dash top.

The base A3 1.4 TFSI also comes standard with 16-inch alloy wheels, an electric parking brake, power windows/mirrors, cruise control, a multifunction leather steering wheel, four floor mats and a space-saver spare wheel (there is no provision for a full-size spare).

If it is sold here, expect the same equipment in the entry-level turbo-diesel A3 1.6 TDI Attraction, which in Sportback form costs $900 more than the 1.4 TFSI and could therefore also undercut $40,000.

As with the A3 Sportback 1.8 TFSI and 2.0 TDI Ambition models, which both cost $42,500, the more powerful and better equipped A3 sedans add 17-inch alloys, aluminium window surrounds, door sills and cabin highlights, sports front seats, a sports steering wheel, more extensive trip computer and the four-mode Audi Drive Select system, which changes the car’s throttle, steering and transmission response.

Also echoing the A3 Sportback will be a host of grouped and individual options, including metallic paint (a pricey $1050), panoramic sunroof ($1950) and a cracking 14-speaker 705-Watt Bang & Olufsen stereo ($1750).

Apart from stand-alone 18- and even 19-inch wheel options and a full LED lighting system including automatic high beam and adaptive headlights, there will be a $2000 Style pack including xenon plus headlights, LED daytime running lights, larger alloys and sports suspension on Ambition models. ??

For $2990, the Technik package bundles a larger seven-inch screen, satellite-navigation, a reversing camera, DVD player, self-parking system,front parking sensors, twin SD memory card readers, voice recognition, a 20GB hard drive and a clever touch-pad system that recognises even the worst handwriting. ??Audi will also offer sumptuous S Line ($1800), enhanced-ergonomics Comfort ($2200) and sensor-based Assistance ($1800) packages, the latter comprising the full gamut of driver safety aids including lane departure warning, adaptive cruise control, Audi pre sense and high beam assistant.

Review of Audi’s first A3 sedan at motoring.com.au

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