Are Volkswagen luxury cars

Audi will sell the new version of its A3 hatchback in the United States beginning in 2004. The new car, based on the Steppenwolf show car from last year's Paris auto show, will slot under the new A4 sedan in price and should compete in the American market with the Mercedes-Benz C230 sports coupe—the only other premium small hatchback in the States. The A3 will go on sale in Europe late in 2002, where competitors abound. Ostensibly based on the Volkswagen Golf, the A3 will likely offer the corporate 1.8-liter turbocharged motor as well as a 3.2-liter version of the Volkswagen VR6. The A3 will be offered with a six-speed manual or a continuously variable automatic transmission. Eventually, the model line will also include a 200-plus-hp S3 high-performance model and a rugged-looking tall wagon in the mold of the A6 Avant-based Allroad. While Audi, the premium brand of VW, gets set to plumb the lower portions of the market with the A3, parent-company VW will make good on its promise to construct a full-size, full-on luxury ride. Set to be unveiled at the Geneva auto show this spring, the project D1 luxury car will initially be powered by a 414-hp W-12 engine backed by a six-speed automatic transmission. When the as-yet-unnamed vehicle makes it to America perhaps in 2003, we'll also get the choice of a W-10 powerplant. The V-6, W-8, and diesel V-10 that VW will offer in Europe won't make the trip across the ocean. All U.S. D1s will use a pneumatic suspension with automatic electronic shock adjustment and the 4Motion all-wheel-drive system. At 200 inches long, the D1 is only a couple of inches shorter than the Mercedes S-class that VW is targeting. Other competitors include the Jaguar XJ8, the Lexus LS430, the BMW 7-series, and, well, the Audi A8. Expect a price of $55, 000 to $65, 000.