Audi decided to build the allroad quattro only after a long period of research and development.
Executives approved the allroad quattro in November 1997. The car made its public debut at the January 1998 Detroit auto show.
The thorough preparation is evident in the fact that the vehicle seen at Detroit went into production largely unchanged, said Matthias Mullenbach, head of product marketing for the Audi A6 range.
The allroad quattro is Audi's first attempt to take sales away from the sport-utility market.
Mullenbach said the off-road concept had been discussed within Audi for several years. 'Technically we have the benchmark quattro concept, plus we have high-performance engines. It is a concept that is very close to our heart.'
Quattro - Italian for 'four' - was adopted by Audi in 1980 to designate its four-wheel-drive cars.
The allroad quattro is based on the A6 Avant, the station wagon version of Audi's medium-luxury A6 sedan. Compared with the A6 Avant, the allroad quattro has 700-800 new parts.
Development costs were about a third of those for a completely new vehicle, said Stefan Haerdl, technical leader of the project.
'Our route was to take a basically road-going package and add off-road attributes,' he said.
The allroad quattro has a higher ground clearance than the A6 Avant and uses a torsion differential to vary the distribution of power between the front and rear axles.
Major body changes were not necessary, said Haerdl. 'The A6 is a very rigid vehicle, so we only had to undertake local strengthening to meet the needs of the allroad quattro's larger wheels and tires and higher power outputs,' he said. 'The headlamps were also made bigger to give the vehicle a more macho look.'
Audi opted for an air-spring suspension system - the major technical innovation of the allroad quattro. That provided higher road clearance, while at the same time giving good road-going performance.
The air-spring suspension system has four levels, making it possible to vary the allroad quattro's ground clearance by up to 66mm. Besides a manual control mechanism there is an automatic ride height control system that sets the ideal ground clearance depending on speed.
Air-spring suspension systems are offered in an increasing number of upmarket cars. Audi's system is likely to find its way into other high-end vehicles within the Volkswagen group, said Haerdl.
Because it is derived from a station wagon, the allroad quattro has none of the drawbacks of a traditional sport-utility, said Haerdl. These drawbacks include a high center of gravity, bumpy ride, poor acceleration figures and a low top speed.
'An Audi is a very sporty vehicle and we wanted to avoid these disadvantages,' said Haerdl.
Like the Audi TT, a large part of the allroad quattro's development work was outsourced to Steyr Fahrzeugtechnik in Graz, Austria. Haerdl was also the TT's technical project leader. Audi values were ensured by precise initial specifications for the allroad quattro, he said.
Audi has been offering an increasing number of quattro models, particularly across the A6 range.
But sales of the A6 Avant have suffered in the USA as consumer tastes have shifted from traditional station wagons to sport-utilities.
With the allroad quattro, 'we wanted to identify a new mar-ket segment for Audi,' said Mullenbach.
Mullenbach predicts more than 60 percent of allroad quattro customers in Europe will be conquest buyers from other brands. That percentage will be even higher in the USA, he said.
The allroad quattro is being built at Audi's plant in Neckarsulm, Germany, at the rate of 20,000 units a year.