The Audi logo is seen on the ceramic brake of...

The Audi logo is seen on the ceramic brake of a Audi RS7 Quattro automobile. (March 12, 2013) Credit: Bloomberg News

Volkswagen AG’s Audi brand next month will unveil its smallest sedan, a version of the A3 compact, at the Shanghai Auto Show and will begin selling the car in early 2014 in the United States and China.

In the United States, the new A3 sedan will debut as a 2015 model and will compete for entry-level premium buyers with the new Mercedes-Benz CLA, according to a source familiar with Audi’s plans.

The U.S. model is expected be priced from around $30,000, which is also the target price of the CLA.

Audi has revealed few details of the new A3 sedan ahead of its Shanghai introduction. But Audi CEO Rupert Stadler referred to the car on Tuesday at a press briefing in Germany.

Describing the A3 sedan as "a new family member," Stadler said the car will be "an important derivative which will stimulate additional growth, especially in China and the U.S."

Chinese press reports have said the A3 sedan will be assembled locally next year by the FAW-VW joint venture that builds a variety of Audi models.

The A3 sedan will be based on a version of Volkswagen’s MQB global compact platform, according to a supplier source familiar with VW’s plans.

The German automaker is investing nearly $70 billion in the MQB, the basic architecture for millions of its current and future small cars, including the A3 and the VW Golf, according to investment bank Morgan Stanley.

Speaking at a press event at Audi headquarters in Ingolstadt, Germany, Stadler said the A3 "has been a driver of our growth." Since the car’s launch in the mid-1990s, Audi has built nearly 3 million copies, he said.

Audi first unveiled the A3 sedan as a concept at the 2011 Geneva Auto Show. It will provide U.S. journalists with a preview of the production model in two weeks, just ahead of the New York International Auto Show. But the actual car will not be shown to the public until its debut in Shanghai in mid-April, the company said.

Audi of America now sells only the A3 five-door hatchback, with prices starting at $28,165 for the 2013 model. The 2015 A3 sedan is expected to be slotted below the A4, which is priced from $33,395.

The A3 has not been a big seller for Audi in the U.S. market. Last year, A3 sales totaled only 7,205, compared with 35,415 for the larger, more expensive A4 and its performance derivative, the S4.

An Audi of America spokesman on Tuesday declined to comment on press reports in China and Europe that the A3 sedan will be offered with both gasoline and diesel engines and eventually will come in a hybrid variant.

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