On the face of it, this is a bad time to be launching a new sports utility vehicle. The market for sUVs in Europe and the US is suffering from the dual effects of high fuel prices and the credit crunch. But Audi chief executive Rupert Stadler has no worries about the Q5, little brother to the big beast Q7, and it's rival for the BMW X3 and Land Rover Freelander.

At its introduction in the Spanish city of Valencia, Stadler said We see an increasing demand for SUVs. Maybe more of them will be smaller Q5 size rather than Q7 but even in the US we expect growth for the premium brands in this segment in the next five years." The Q5 is based on the latest A4 car platform and is, according to Audi, 'the sports car among sUVs' Having driven it, I am not sure about that but it is more car-like and more civilised than most high-set four-wheel drive vehicles and, at least on normal roads, an improvement on the X3 and Freelander.

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The engine choice is two diesels (2 and 3 litres) and two petrol engines (2-litre and 3.2 V6). They are mounted longitudinally with Audi's traditional Quattro full-time four-wheel system. Audi emphasises the energy saving measures on the Q5 the 7 speed dual clutch gearbox, low drag coefficient, low rolling resistance tyres, low consumption LED lights and air conditioner. The 2-litre TDI version with 172Ps averages 6.7 litres/100km, 'without sacrificing anything in the dynamics'.

Audi's plethora of new models intended to increase production to 1.5 million cars a year by 2015 doesn't stop here. Stadler says that it has taken a 'top down' approach to the SUV market, starting with the Q7 and now leading to the Q5. There will be an even smaller Q3 in a couple of years and that may not even be four-wheel drive.