The small Q3 will take on soft-roaders such as the Land Rover Freelander and Toyota RAV4.
Audi will position the Q3 as an independent model range and not as a 3-door version of the Q5.
In fact it seems as if it won't get any Q5 genes and will rather share its underpinnings with that of VW's forthcoming Golf-based SUV.
According to the Septembter edition of topCar the Q3 will feature transverse engines and a choice of front- or all-wheel drive.
It will also come with VW's 4MOTION all-wheel-drive setup.
As with SUVs such as the BMW X3, the Q3 will be aimed at offering excellent road holding and driving dynamics on tarmac.
Naturally the Q3 will feature a potent engine line-up and will come with a range of new petrol units using VW's TSI system, employing a supercharger and turbocharger. Of course Audi will offer TDI derivatives too.
Rumour has it that there might even be a red-hot "S" version with a power output of 209 kW.
Where the five-door Q5 model will go on sale in 2008, the Q3 will probably only follow in 2009.