It's hard to do battle with MINI in the premium compact segment. The Cooper and its derivatives bring style and nostalgia to the game, proving that consumers are okay with spending some hard-earned scratch on an iconic coupe.

The Audi A1 Sportback - designed to fill the slot left by the discontinued A2 - lacks the MINI's wistful sensibilities, but it comes packing an extra set of doors, four usable seats, some handsome sheetmetal and an multimedia interface that ties in with the driver's mobile phone to provide navigation, music and an internet connection. Oh, and it can make calls too.

A 1.4-liter TSI engine equipped with both a turbo and supercharger puts out 150 hp to the front wheels through Audi's S-tronic dual-clutch gearbox, and a 27 hp (and 111 lb.-ft.) electric motor drawing power from a lithium-ion battery pack can motivate the A1 in start-and-stop traffic. Look for the production A1 to debut early next year, with sales beginning in late 2009.

All the details are in the press release below the fold and check out both our gallery of live images and press shots below.