Volkswagen Group luxury brand Audi is to produce a new, B segment SUV called the Q1 at Ingolstadt from 2016.

“The Audi Q1 is part of our broad-based SUV strategy. It is designed on the basis of the modular transverse engine concept and will round off our Q series at the bottom end,” said Audi chairman Rupert Stadler.

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The Q1 is the latest weapon in a product blitz that, by 2020, will see the expand its product range from 49 now to more than 60 models and sales of more than two million vehicles a year.

Audi said the Q1 will help improve capacity utilisation at its main plant in Ingolstadt over the long term. The plant produces A and B segment cars – the A3 and A4/A5 family.

Peter Mosch, chairman of the General Works Council, said: “This is a clear commitment to Ingolstadt as a production site.” The decision on the new model is regarded as proof that employee “codetermination” secures jobs and that the internationalisation of the Audi group is not taking place at the expense of the sites in Germany, he added.

Audi already builds Q3, Q5, and Q7 SUVs. It claims the Q5 is the global market leader in its “direct competitive environment” and sales this year were up 17% to 194,430 units by the end of October. Around 230,000 units of this model are planned to be built in 2013 which is more than half of the total Q volume.

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The proportion of the company’s total production volume accounted for by SUVs will be about 28% this year, and is planned to rise to more than 35% by 2020.

Overall, Audi has sold over 1.5m Q family model since launch in 2006.

The BMW XS1 is likely the Q1’s main target. Other B segment SUV entries in Europe include the Chevrolet Trax, its Opel/Vauxhall Mokka clone and the Nissan Juke.