The second diesel offering from Audi to be launched in the US this year after the Q7 TDI is the 2010 A3 Sportback TDI and it will begin arriving at the company's dealers in late November 2009. The base price for the front-wheel drive model with Audi's S tronic dual-clutch transmission is $29,950, but you'll have to add another $825 to that for...
I personally think the A3 is priced far too high, although it's not quite as ridiculous as the BMW 1-series. The problem is that Americans still aren't big on hatchbacks, and while that may be changing they certainly don't perceive them as luxury cars. Interestingly, in Europe the A3 is available completely stripped down, no power windows, no A/C, 1.4 liter engines, etc. But then, BMWs are also available with much smaller engines than we have in the US.
The A3 has an added level of luxury and some nice options, and the dealer experience tends to be quite a bit better although there have been some exceptions. Then there's the question of styling and for some people, the badge stuck onto the car. But then, people who really care about the badge usually want a more imposing car which means they're more inclined to start with the A4.
As for reliability, it's a problem with all European brands. The Germans actually tend to be better than other Europeans. It's been like this for decades to varying degrees and I don't expect it to change. Japanese, mainly Toyota and Honda, tend to keep things simple and carry over a lot of existing technology from previous generations. When issues arise they tend to address them with a straightforward fix a couple of years into a generation. Europeans address problems as necessary but far too often resort to significant redesigns. The second issue I see I believe stems from labor issues in Europe. Far too many problems in European cars seem to stem from manufacturing defects and issues with parts suppliers. I don't know if the issue is work ethic or what but I don't see this ever changing.