Compact cars generate much less of a profit margin than larger ones, but economy of scale still renders them viable. With the ever-tightening environmental laws, however, this may cease to be the case.
Speaking in a recent interview, Audi CEO confirmed that the current-gen A1 Sportback would not go into the next generation. With the adoption of the Euro-7 standard planned in 2025, Audi will be unable to continue the production of ICE-powered compacts in Europe, because the associated costs will be too high.
In February this year, the company made a statement that switching current small-displacement urban cars to electric power was not viable, either. As such, it would appear that the A1 will be good for good soon, replaced with either the Q2 SUV or an all-new model. The latter might be called A2 and based on the AI:ME Concept.