In mainland Europe, where gas mileage is measured in liters used per 100 kilometers (l/100km), a 'three liter car' doesn't usually refer to engine capacity.

Instead, it means 3L/100km, or around 78 MPG. And now Audi wants to make a one-liter car--the equivalent of 235 MPG.

Revealed by What Car, the new Audi would be more mainstream than the Volkswagen group's previous 1-liter vehicles, such as the original cigar-shaped 1L and L1 concepts, as well as the more recent XL1 concept.

While the XL1 is actually set for limited production and has been spied testing, Audi's car would be more recognizable as an Audi product, and would need to deliver in terms of passenger comfort and space. It would likely offer seating for four adults.

The car could also be based on the platform used by Audi's current smallest model, the A1--though more extensive use of light-weight materials like aluminum and carbon fiber would be required.

Power would come from a small diesel engine, not unlike that in the XL1 concept--and like the VW, some form of electric assistance would also be required.

The XL1 itself is a plug-in hybrid using a 47-hp modular 0.8-liter, two-cylinder turbodiesel engine--half of the firm's four-cylinder, 1.6 TDI--paired with a 20 kW electric motor.

The futuristic VW is more compromised than the Audi is expected to be though, with only two seats, a narrow body and an unusual profile, all of which could put off more mainstream buyers.

Wolfgang Durheimer, Audi board member for technical development, says that despite the technology, the car would have to cost a lot less than Audi's high-end models like the A8 and R8. At the same time, it's unlikely to be cheap...

He also confirmed that the all-electric Audi A2 concept shown at last year's Frankfurt Auto Show will not go into production, though some of its technology will filter into Audi production cars.

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