This is the Audi RS5, which was spied undergoing handling testing on the Nurburgring last week.
The BMW M3-challenging RS5's large front spoiler hints at its high-performance credentials, although the production model is also expected to get dual oval exhausts, a trademark of Audi RS models.
Instead of the V10 from the larger S6 or an uprated version of the supercharged V6 from the new S4, the Audi RS5 will be powered by a 450bhp 4.2-litre twin-turbo V8 with 332lb ft of torque. That compares with the BMW M3's 414bhp and 295lb ft of torque.
Buyers will get a choice of a six-speed manual or seven-speed twin-clutch gearboxes. Equipped with the latter, it should mean the car can travel from 0-62mph in around 4.5sec.
Lowered, stiffened suspension, wider front and rear tracks and improved brakes will also boost performance, as will an active rear differential, as seen on the latest S4.
Early reports suggest the car will go on sale in 2010.