When Audi released the A3 for the 2006 model year, the company took a gamble in introducing a luxury hatchback to the United States without a more traditional sedan option available. American car buyers tend to prefer sedans over hatchbacks and wagons, and buyers in the luxury segment where the Audi A3 resides could easily afford an SUV or minivan if functionality was their main concern.

The A3 wagon has been popular enough that four years later, the luxury compact wagon is still on sale, but Audi has decided that there is a larger compact luxury market than the A3 wagon can capitalize on. Now, Audi is designing a new A3 sedan to capture the part of the market more concerned with looks than hauling capacity, according to Autoblog. Audi has not officially announced an A3 sedan, but the decision makes sense in an American market where anyone looking for a wagon’s roominess can buy a crossover SUV with a higher ride height to peer over traffic.

Because the A3 sedan has not been officially announced, there are no images available yet, but expect the styling to remain very similar to the wagon's.

Audi’s A4 sedan has grown quite a bit over the years, so the German company is currently without a compact sedan. An A3 sedan would fill that gap in the lineup and also give Audi a car without any direct competition from BMW or Mercedes-Benz. The BMW 1-Series is only available as a coupe, so buyers who routinely have more than one passenger will be obviously drawn to the larger A3. Mercedes-Benz’ smallest car right now is the C-Class, which is the same size as the larger Audi A4.