The A3 will be the first model from the Audi stable to be locally produced before being launched in India. Other models, such as sedans A6 and A4; SUVs Q5, Q7 and Q3 which are locally produced now were imported as completely built units (CBUs) at the time of launch.
"The local production of the Audi A3 Sedan in India is in continuation of our growth strategy and consistent focus on the Indian market," Audi Board Member for Production, Hubert Waltl said.
The A3 is slated to be launched in the Indian market next month and will be available in both petrol and diesel variants.
Explaining the reasons for producing the A3 in India even before it is launched, he said: "The market potential coupled with the world-class infrastructure in the plant, efficient working processes, qualified workforce and a well-developed logistics environment were the factors that motivated us to expand the product portfolio at the Aurangabad plant".
The whole-year capacity at the plant for all Audi models is more than 14,000 units in a one-shift operation.
Bullish on the potential of the A3, Audi India Head Joe King said: "We believe that the launch of this car would see us further consolidating our market share and strengthen our leadership position".
In 2013 Audi sold 10,002 units in India, becoming the first luxury car maker to cross the 10,000 units milestone and stay as the number one ahead of German rivals Mercedes (9,003 units) and BMW (7,327 units).
He further said: "The Audi A3 Sedan will be a game-changer for us in India, since it will open up the Luxury segment like never before...I feel that the Audi A3 sedan is just the right product for the Indian market".
Globally, Audi A3 has been a huge success and was voted 'World Car of the Year' in 2014 overcoming 23 other rivals, King added.
In India, the luxury car market has seen the likes of hatchbacks A Class and B Class from Mercedes and 1 Series from BMW that has improved the affordability range with prices starting just above Rs 20 lakh.
The Audi A3 is also targeting aspiring customers as well as repeat buyers.
"(With) Audi A3 Sedan, we will be creating a new segment, that of the compact luxury sedan, in India. The Audi A3 sedan will attract an entirely new customer segment," King said.