Things are started to heat up in the premium compact SUV segment. Last year, the segment was dominated by the Audi Q5 and Mercedes GLK, mostly due to the X3 approaching the end of its lifecycle and in need of a design refresh. The compact has recently seen some increased competition from the Lexus RX, a car that many consumers compare it now against the aforementioned models.

With the new X3 just weeks away from hitting the showrooms of BMW dealerships, Audi comes out with a statement downplaying the threat it could pose to its high-seller Q5.

“I don’t expect to see any downturn in Q5 volume. In fact, we will sell more Q5s next year than we did this year,” Johan de Nysschen, president of Audi of America, said in an interview for Automotive News at the Los Angeles auto show. “The car is hot.”

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Sales of the Q5 through October rose 77 percent compared with last year to 18,735, according to Autodata Corp., a Woodcliff Lake, New Jersey-based researcher.

Audi has a 12-day supply of the Q5 and the company could sell 1,000 more a month if they had more vehicles, de Nysschen said.

It is fair to say that BMW has reinvented this small, premium SUV segment with their first generation X3. In 2004, the only company running a product in this space was Land Rover and their Freelander model. The X3 positioned itself as a compact, premium, versatile Sports Activity Vehicle.

The previous generation X3 sales have exceeded BMW’s expectations throughout the years, but there was still room for improvement. Moving up in size will allow the X3 to be positioned at the level of the first X5 model, but at a lower price. Adding into the buying factors an improved interior design, significant performance boost from the new six-cylinder engines and 20% more fuel efficient than its competitors, the new X3 is looking to regain its status within the segment.

See our test drive review of the 2011 BMW X3

“It’s likely we’ll see the segment really grow to naturally accommodate whatever plans our BMW colleagues have,” de Nysschen said.

We are already looking forward to test drive comparisons between the cars.

Read our photo comparison between the BMW X3 vs. Audi Q5 vs. Mercedes-Benz GLK

[Source: Automotive News ]