Our spies caught the new Audi Q5 out for winter testing without the usual camo clothing you might expect from such spy photos.

We’ve got to laugh a little at the German automaker for deciding to intentionally offer less-than-optimal fuel efficiency in the Q5s headed to North America. Their 2.0-liter TDI is actually more efficient than the hybrid powertrain that will be available stateside.

To keep people from flocking to the most efficient bird in the roost, Audi decided to slip the same 3.0-liter diesel from the Q7 into the smaller Q5, branding it as a more performance-oriented option.

You can see in the photos that the Q5 is getting Audi’s S-line treatment like the new A4 and A6. We’re also told that the compact SUV will come with the latest multimedia interface, including Audi connect and Google Maps.

GALLERY: 2013 Audi Q5 spy photos

Efficiency is important these days. The government is cracking down on gas guzzlers and imposing strict regulations that force automakers into saving more fuel than ever before.

That’s why it might come as a surprise that Audi of America is opting not to offer their most efficient diesel engine in the upcoming 2013 Q5. That’s right, the German luxury brand sees fit to package the same diesel 3.0-liter V6 that they currently offer American consumers in the Q7.

Why, you might ask? The answer is simple, though less than logical. Audi is afraid of selling a 2.0 turbo diesel Q5 because it gets better milage than the hybrid-electric powertrain they are offering in the same vehicle.

In other words, the diesel engine is too efficient for the discerning U.S. palette. Now, there may be some merit to the theory, considering diesel fuel is more expensive than gasoline. People can be quick to judge at the pump and diesels still carry a somewhat sordid name among American consumers, even today.

On the other hand Hybrids evoke green imagery and environmentally friendly thoughts, which is even funnier when you realize that Europeans have been driving diesels to save fuel for decades.

Regardless of the reasoning, Audi is doing a good job of pandering to consumer egos, saying they chose to offer a more performance oriented diesel and an efficient hybrid.

Speaking of performance-oriented diesels, the company will also be offering Americans the same engine in the A8 later this year. The same logic that spoiled the chances for a 2.0-liter diesel Q5 is also keeping the hybrid A8 out of reach.

“Our current A8 with the 4.2L gasoline V-8 gets the same fuel economy as hybrids from BMW, Lexus and Mercedes” due to its emphasis on weight-saving aluminum construction, Audi of America President Johan de Nysschen said to Ward’s Auto. “Imagine now what happens when you put a diesel in the car. You have all the driveability and driving enjoyment with even better fuel economy.”

In fact, 41% of Q7 and 55% of A3 sales in the U.S. were diesel models, though the fact that Audi still ships from Germany probably restricted supply, so it makes sense that they would be rolling more models out with the oil-burning option.

GALLERY: Audi Q5 Hybrid

[Source: Wards Auto]

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A while back we revealed that Infiniti‘s working on a new entry-level, FWD compact that would be based on Mercedes-Benz‘s A-Class platform. We now have news that Canadian-Austrian auto supplier Magna Steyr will be in charge of developing the entry-level model for Infiniti.

The final contract is expected to be agreed upon soon, allowing Magna to begin production at their factory in Graz, Austria starting in 2012. As we reported earlier, the new compact will be based on Mercedes-Benz’s MFA architecture which is seen in their A- and B-Class vehicles. Daimler will also be supplying preassembled complete parts to Infiniti.

According to sources, Infiniti’s new compact will be powered by Mercedes’s four- and six-cylinder powerplants, with diesel variants for the European market. The plan is to produce around 50,000 to 60,000 units a year in Graz, exporting them globally to compete against BMW‘s 1-Series and Audi‘s popular A3.

As mentioned earlier, Infiniti’s new FWD compact will be based on the Etherea Concept we saw at the Geneva Motor Show.

GALLERY: Infiniti Etherea Concept

[Source: Automotive News]

The Audi A3 was caught by our spy photographers undergoing winter testing in Sweden. Despite heavy camoflague, we already know what the next A3 will look like – look at any current Audi for clues to what the front and rear treatments will resemble.

The new A3 will come in three and five door variants (dubbed the Sportback) a convertible and interestingly, a sedan. Audi previewed the sedan at the 2011 Geneva Auto Show, and while the production version may not be as radical as the awesome looking concept (which packed a 408-horsepower 5-cylinder engine and a 7-speed dual clutch gearbox), the car will definitely be attractive, and pack a full suite of turbocharged gasoline and diesel engines, dual clutch gearboxes and all-wheel drive.

North America will definitely get the sedan, and likely the five-door hatch, but we may not get the 3-door or ragtop versions, as those have previously been the exclusive domain of world markets.

Gallery: Audi A3 Spy Shots

Audi‘s growth plan will hinge significantly on the success of its upcoming all-new A3 model. Teased with the A3 Sedan Concept at the Geneva Auto Show earlier this year, the 4-door was an obvious sign that Audi wants to push the car hard in the North American marketplace. And why not, with the proposed concept almost identical in size to the current A4. Plus, with the concept car’s 408-hp engine and beautiful styling it certainly won over the younger enthusiast base – including most every blog on the internet.

According to Audi chief designer Stefan Sielaff, along with the sedan, the German automaker is looking to introduce three additional models in the A3 range. Essentially a down-sized version of the A4/A5 range, there will be an A3 hatchback (a must for Europe), as well as both a convertible and sportback model.

Using different versions of the same MQB modular architecture, the longer 103.5-inch wheelbase will be used for the sportback and sedan, while a shorter 102-inch wheelbase platform will be used for the convertible and hatch. Audi has no indicated if it will build a coupe model for the A3 family, although S and RS models are likely.

GALLERY: Audi A3 Sedan Concept

[Source: AMUS]

Volkswagen is recalling 168,000 diesel engine vehicles produced from 2009-2012 over a possible leak from the fuel injectors that could start a fire.

The vehicles in question are Volkswagen Jetta, Jetta SportWagen and Golf models as well as the Audi A3 TDI. 161,144 VWs and 7,131 Audis are involved in the recall, while no injuries or accidents have been reported so far. Volkswagen says that about 20 percent of the vehicles in question have fuel injector lines that could be potentially faulty. The company will begin notifying dealers and owners in November.

[Source: The Detroit News]

While the British Royal Family are known for their patronage of British cars (with the Queen favoring Land Rovers and Prince Charles being a notable Aston Martin owner), Audis have been making an appearance in the  family’s fleet over the last decade, and the Daily Mail reports that the company offers some very favorable terms to the Royal Family to help sway their car purchases.

As valued customers, the House of Windsor is given a 60 percent discount off the sticker price, and their cars are personally delivered. While Prince Charles favors an A8 and an A6 Allroad station wagon, Prince Harry and Kate Middleton both drive A3 hatchbacks. Prince William seems to drive the most exciting car of the bunch, a dark grey S4 with the previous generation 4.2L V8.

While giving the cars away for free would undoubtedly raise concerns about bribery and other unsavoury tactics, the steep discounts offered help sidestep those questions will giving Audi excellent exposure. With the upcoming royal wedding, and Kate Middleton’s status as a style icon, Audi seems to be making some solid moves to get their brand associated with the “right” crowd as they try and take on blue chip German brands like Mercedes-Benz and BMW.\

[Source: Daily Mail]

The Audi RS3 Sportback is another hot hatch out of most people’s ballpark, but that won’t stop us from bringing you live shots of it as it makes its first appearance at the Geneva Auto Show.

With a 340 horsepower, 332 lb-ft turbocharged 5-cylinder engine and a 7-speed dual clutch transmission, the RS3 can hit 60 mph in 4.6 seconds. Helping bring this car to a halt are 14.57″ 4-piston brakes up front and 12.2″ rears. Wider fenders, a blacked-out grille and a lower ride height help give off subtle cues as to what this car can do. Think of it as a TT-RS in a more practical package.

Gallery: Audi RS3 Sportback

The Audi A3 might be a fancy Golf in its current form, but the Audi A3 Concept shown at the Geneva Auto Show is a complete 180 from that formula.

Packing a 408-horsepower 5-cylinder engine and a 7-speed dual clutch gearbox, the A3 sedan has more in common with the fearsome Audi Quattros of yesterday than the compact hatchback of this decade. The A3′s 4-door sedan bodystyle has grown to within half a foot of the bigger A4 in terms of length, perhaps a concession to North American tastes, or perhaps because so much power in a short wheelbase car would make an early Porsche 911 look like a docile handling tourer. Audi’s MMI media interface system also makes an appearance but please, don’t take your eyes off the road in a car this quick.

GALLERY: Audi A3 Sedan

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North Americans only received the small Golf-based A3 hatchback a few years ago, but Audi is planning to expand the lineup with a fastback four-door sedan at the Geneva Auto Show packing 400+ horsepower and quattro AWD.

The power comes courtesy of a turbocharged 5-cylinder engine, attached with precision to a 7-speed S-tronic transmission. Stylistically, the teaser above shows us the trademark LED lights and angular Audi grille from its incredible Quattro Concept and puts it in a package that isn’t just aimed at drooling 1980s rally nerds (like us).

At 14.5 feet long, it will be approximately the same size as the A4 (15.4 feet). But after news of the A5 Sportback and the A7 coming to American shores, Audi hasn’t been shying away from overpopulating the market. The A3 will continue to compete against the 1-Series and the Mercedes-Benz C-Class and Coupe.

GALLERY: Audi A3 4-Door Concept