The battle axes are sharpened and starting to swing in Germany between the three largest luxury car makers, as Audi admits for the first time that they plan to sell their compact Q3 SUV in America.

The Volkswagen-based luxury brand has been hinting and teasing the notion that we might get the Q3 on North American soil, but until now there wasn’t any way to be sure. Now Audi has confirmed it will reveal a Q3 “Vail” Concept at the Detroit Auto Show on Monday, using the vehicle as part of a larger strategy to overtake BMW as the top-selling luxury brand by 2015.

“The next pillar of the market that we have to conquer is the United States,” Audi CEO Rupert Stadler said in London on Thursday. “We see opportunities in the SUV and sedan segments.”

Audi has been growing as a brand outside the U.S. but making a more solid footprint in the American market is essential for them to meet their goal. Here in the States BMW and Mercedes still have a strong grip on luxury sales, but by introducing smaller cars, Audi may be able to change that. Along with the Q3, Audi is expected to deliver several versions of its next generation A3, including a sedan.

Another key point in their strategy will be manufacturing cars domestically rather than shipping and therefore significantly limiting availability to consumers, something BMW and Mercedes have already figured out.

It isn’t as easy as flipping a switch, though, according to Stadler, Audi is finally profitable in America, giving them the confidence to go from wading into full swim.

“In the next decade, we will have to think about the next icon in the Audi brand,” Stadler said. Given the strong trend toward smaller, more economy-minded cars, we’re eager to see what he has up his sleeve.

GALLERY: Audi A3 Concept

[Source: Automotive News]

Our intrepid spy photographers are at it again, catching the Mercedes-Benz A-Class undergoing winter testing in an undisclosed Northern country.

The new car looks to be a radical departure from past versions, ditching the goofy tall-wagon look for something much more akin to an Audi A3. This further differentiates it from the smaller, though visually similar B-Class, which will retain the “MPV” bodystyle so popular in Europe.

The A-Class will be powered by a range of small 4-cylinder engines, but we don’t have many specifics on technical details. Expect the car to bow at March’s Geneva Auto Show.

Gallery: Mercedes-Benz A-Class

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

Honda CEO Takanobu Ito stepped up and assumed responsibility for the Honda Civic’s miserable start in the United States, telling Automotive News that ”The ultimate responsibility rests with me.”

The Civic was left off the Consumer Reports list of recommended vehicles, a rarity for any Honda product. Cheap interior materials were blamed, and many reviewers reported dull styling and driving dynamics as other disappointments. Civic sales are down 15 percent this year, and Honda product planners are hoping for a model refresh as soon as 2013, well ahead of Honda’s usual vehicle schedule.

While Honda decided to stick with a smaller footprint and reduced content for the new Civic (betting on a downward economy) competitors like Hyundai, Chevrolet and Ford went in the opposite direction, offering advanced features like backup cameras, self-parking, powerful engines and bold styling. This approach won out in the end, with the Hyundai Elantra, Chevrolet Cruze and Ford Focus reporting strong sales in the segment.

[Source: Automotive News]

Americans have been historically unreceptive to small cars, and the 2013 Chevrolet Spark represents uncharted territory for the brand, which will introduce their first B-segment car since the Chevrolet Metro, long the butt of jokes for American society.

Unveiled at the 2011 Los Angeles Auto Show, the Spark measures two feet shorter than the already compact Chevrolet Sonic, but is only 6 inches shorter than the Chevrolet Equinox mid-size crossover. These dimensions leave us a bit skeptical, as the whole package seems a tad top-heavy, but the 1.2L 4-cylinder engine only makes 85-horsepower, so high-speed cornering is more theoretical than realistic.

We do like the 2,269-lb curb weight, as well as the 7-inch touch screen and Bluetooth integration. The Spark has done well in a number of world markets where physical space is at a premium, and considering how much we liked the Sonic, we’re optimistic that the Spark will be a fun, if not sporty, urban runabout.

Gallery: 2013 Chevrolet Spark

Toyota will add another vehicle to the Prius lineup shortly, with the upcoming Prius c subcompact. Intended to be the entry point into the Prius range, the Prius c will supposedly get over 50 mpg in the city.

Technology will also be at the forefront of the Prius c, which comes with an integrated app suite for use with websites like Bing, MovieTickets.com, Pandora and OpenTable, along with Bluetooth integration and a host of safety features.

Expect the Prius c to be about the size of a Toyota Yaris, but positioned as a more premium product. Performance details have not been announced, aside from the obvious use of Toyota’s Hybrid Synergy Drive hybrid system mated to a 1.5L 4-cylinder engine. The Prius c will get its official unveiling at the 2012 Detroit Auto Show in January.

Gallery: Toyota Prius c

Mitsubishi has confirmed that two top executives at their American divison have left the company, and that Mitsubishi has no plans to replace them – a curious development for an automaker with mercurial fortunes.

Mitsubishi has struggled in recent years, but has enjoyed a sales surge in recent months, as well as the launch of their all-electric city car, dubbed the i. Gregory Adams, vice president of marketing and product strategy for Mitsubishi Motors North America, and Mike Krebs, vice president of corporate planning and incentives both left the company on October 31st, with Krebs having been at Mitsubishi for over a decade.

Adams position may have an impact on the launch of the i, which is relying on social media and other unorthodox marketing methods to make an impact on consumer perceptions. A Mitsubishi spokesman told Automotive News that day-to-day operations wouldn’t be impacted by the departures.

[Source: Automotive News]

While reviewing the SCCA B-Spec rules, we came across a list of entries for the upcoming class and stumbled upon a few interesting candidates – namely the Volkswagen Polo, which the rule sheet claims may be imported for 2012.

Other entries, like the Hyundai Accent, Scion iQ and xD and Fiat 500 are interesting in their own right (especially since the Accent will face off against the Kia Rio, while the Scions will go against the Toyota Yaris B-Spec), but the Polo has long been rumored for a U.S. debut, and VW is said to be debuting a couple new products at November’s Los Angeles Auto Show. Could this be the introduction for a Volkswagen subcompact in America. Check back November 16th when coverage of the L.A. Auto Show begins.

[Source: Daytona Prototype]

Chevrolet unveiled the first of what will surely be many concept cars based on their new Sonic compact car, with a lifestyle/tuner car designed with input by Motocross legend and NASCAR driver Ricky Carmichael, and a ready-to-go racer intended for SCCA competition.

The Sonic All Activity Vehicle – Ricky Carmichael Concept features a full suite of interior and exterior accessories, including OEM Z-Spec body treatments, an interior made by Fox Motocross from their board short material, and the familiar 1.4L Chevrolet turbocharged 4-cylinder engine to ensure that there’s some go to back up the “show” element.

The Sonic Super 4 Concept, despite the goofy name, is a full-blown race car that is intended to be a turnkey, SCCA-legal car with a proper rollcage, harnesses and a fire suppression system, the Sonic Super 4 is the perfect counterpart to the Ricky Carmichael Concept – it ain’t pretty, but it’s probably very good at its intended mission. The Super 4 uses the same 1.4L turbo 4-banger and 6-speed gearbox as the Ricky Carmichael Concept, but in this application, definitely gets put to much better usage.

Check out the rest of AutoGuide’s SEMA coverage here

Gallery: Chevrolet Sonic Ricky Carmichael Concept and Super 4 Concept

Toyota is setting targets of between 1,000 and 2,000 units per month for the rollout of its Scion iQ city car, and the new vehicle will see a tiered launch that involves an initial rollout on the West Coast this winter with a Midwest and East Coast launch this spring.

The Japanese-built iQ will also have to work around Toyota supplier schedules, which have yet to fully come back online following March’s earthquake and tsunami. While the iQ starts at under $16,000, Scion VP Jack Hollis said that a continued economic downturn would be bad for the car, as it would leave the youth demographic without the funds to purchase the car.