A small sports car Audi is developing will directly challenge the Porsche Boxster, which is making executives at the Volkswagen group nervous.

According to Automotive News Europe (ANE), the R4, if launched, could test the new ownership structure at VW. Porsche recently spent more than EUR4bn to increase its stake in Audi’s parent company, VW group, to 27.4%.

One high-ranking Audi official told ANE that executives are “concerned about how far [Audi] can go” in competing with Porsche. Audi’s R8, a new supercar that goes on sale in spring, already provides a direct challenge to the Porsche 911.

“Our goal is to get some volume from our competitors,” Jens Meier, head of product marketing for Audi, told Automotive News Europe.

While the R4 isn’t set to debut until 2010, Audi will introduce a new A4 sedan at the Frankfurt motor show in September, a company source told ANE.

Although it remains Audi’s top-selling model line in Europe, A4 sales were down from the year before.