December 2, 2013 / 3:41 PM / 4 years ago

UPDATE 1-Audi adds baby sport utility model to SUV offerings

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(Adds detail from statement and background)

BERLIN, Dec 2 (Reuters) - Audi will add a baby sport utility vehicle (SUV) to its offerings in the fast-growing market as the Volkswagen-owned division fights German rivals BMW and Mercedes-Benz for the top spot in luxury sales.

Premium sales No. 1 BMW and Daimler's Mercedes each plan to offer seven types of SUV by 2020 while No. 2 in the market, Audi, is aiming for six, European supplier sources said in September.

Audi said on Monday it will assemble the Q1 SUV at its biggest plant in Ingolstadt from 2016. The company already makes the Q3 compact SUV, the Q5 and the seven-passenger Q7.

Nearly one in every four premium vehicles sold last year in Europe was an SUV, and the category continues to grow despite concerns about size and fuel consumption, according to UK-based consultancy LMC Automotive.

Audi, VW's flagship division which contributes more than 40 percent to operating profit at Europe's No. 1 vehicle maker, wants to increase its model range to more than 60 by 2020 from 49 as it aims to overtake global luxury sales leader, BMW.

The Q1 production will make up for Audi's biggest factory, with 37,000 workers, losing Q5 to a factory in Mexico from 2016, Audi said. It plans to build 230,000 Q5 SUVs this year. (Reporting by Andreas Cremer; Editing by Louise Ireland)

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