HERNDON, VA - BMW is thought to be working on a sub-1-series mini car, Daimler already has its Smart, and soon Audi will join the club with its own fuel-sipping urban warrior, according to www.motorauthority.com.

The latest reports indicate the car will be based around the same platform as VW's up!, and will do battle with the likes of Ford's Ka, Toyota iQ, and the Fiat 500. The car is expected to be called the E1 and is to be the entry to a range of new "ecological" models, which will span everything from minicars to performance models.

Power will come from a 600cc turbocharged two-cylinder engine in either petrol or diesel guises. The small engines have CO2 emissions under 100g/km and offer about 80 mpg. An electric powertrain is also being considered, but as yet no details on its capabilities have surfaced, according to Motor Authority.

Positioned below the A1, the E1 would also get a 1.2L three-cylinder. Production hints the E1 could be sold in America, though poor exchange rates, high transport costs, and a generally weak economy could conspire against such a decision, according to Motor Authority. Nevertheless, given the expected production time frame, Audi should have several years to makes its decision.

While the VW version of the up! will be hitting the streets in 2010, the Audi variant is not expected until late 2011. Production will be handled at VW's plant in Bratislava, Slovakia, alongside the up! version as well as Skoda and Seat variants.