Available only as a hatchback, the Audi S3 was the more sporty version of the regular Audi A3. The turbocharged 4 cylinder was capable of 165 kW (222 hp) and 280 Nm (206 ft-lb) of torque, marking the first time a small 4 cylinder engine had been used in an Audi S car.
While the S3 was all-wheel drive, it did not use Audis quattro system. Instead the Haldex system from Volkswagens parts bin was implemented. This meant the car was mostly front-wheel drive with the ability to adjust the bias of torque distribution from the front to the rear axle when required.