German luxury car maker Audi said it has started producing its compact sports utility vehicle Q3 in India, at the Aurangabad plant. It's the fifth model to be locally produced. Increasing demand for the Q3 made Audi take the decision.

The Audi Q3 will be produced in the newly constructed hall at the group plant Skoda Auto India Private Limited (SAIPL) in Aurangabad, which covers a floor area of 20,000 square meters (215,278 square feet). The Audi Q7 is also produced in the same hall.

“Local production of the Audi Q3 means that Audi India is now building all our Q range models locally. This will reduce waiting times for our customers and will enable us to offer a wider range of versions in the market. This move demonstrates our confidence in the success of our Q range, which has positioned itself as a leader not only in the product category, but has emerged as a lifestyle statement. We are confident that we will continue to retain our dominance in the luxury SUV segment in India,” said Joe King, Head of Audi India.

The increasing demand for the Audi Q3, Audi Q5 and Audi Q7 models has helped the company to enhance its market share in India. Over the first eight months of this year, the Company increased its sales in the Indian market by 19 percent to 6426 vehicles (January – August 2012: 5406).

The local assembly of the Audi Q3 mean that its prices of its variants are likely to reduce and give it a better chance to compete with its rivals.