The Ford Focus RS got some really great raves from motoring editors and it might just be the hot-hatch to beat in the market. As a contender, Audi isn’t going to let Ford bid for domination without a fight. Soon to roll out of Audi’s production lines are the A3 sedan an d a hybrid variant. Now reports have it that Audi is working on a sporty version with the RS3.

Powering the RS3 will be a 2.5L 5-cylinder twin-turbo engine coming from the TT. The engine will dish out 355 horsepower and will be capable of a max torque of 332 lb-ft. The engine will be mated to the new seven-speed dual-clutch gearbox and torque-vectoring differential.

No performance figures yet but the power figures will definitely put the car in good shape to compete with the Focus RS which packs a “measly” 300 hp (which, in fact is already an engineering marvel given that the RS is front-wheel drive.) The Audi, however, sill be a four-wheel drive car making it more capable of putting down the power on the road.

The car is set to be launched by the end of 2012.