Audi's $130,000 R8 sports car, unveiled on Sept. 27, the eve of the Paris Motor Show, is a brash young challenger to the exclusive club of European sports carmakers, from Porsche and BMW to Maserati and Aston Martin. Like its competitors in the $120,000-plus class, the Audi R8 will sell in limited numbers - probably not exceeding 5,000 cars a year. There may even be a year's wait for the 480-horsepower car, which hits U.S. showrooms next year and is largely hand-built at Audi's plant in Neckarsulm, Germany.

Audi's R8 is a direct challenge to Porsche's $100,000 Carerra 911, with more horsepower and a higher price tag than the Carrera, but less than the Turbo Carrera. It has a midmounted V8 engine, permanent four-wheel drive, and Audi's Space-Frame aluminum body from the flagship A8 luxury sedan. The car also shares some components with the Lamborghini Gallardo, such as the automatic mechanical gearbox. Lamborghini belongs to Volkswagen's Audi group, along with Spanish automaker Seat.

Industry analysts said Audi's R8 catches larger Bavarian rival BMW at a moment when BMW has no similar model to defend its turf. Now the global No. 1 premium automaker in terms of vehicle sales, BMW has been pondering a Z10 sports car but has nothing in the R8 segment since it built the limited edition Z8. "BMW has nothing to go up against the R8. That's bad for its sporty brand image," says Christoph Stuermer, senior researcher at Global Insight in Frankfurt.

Audi pioneered new lighting technology for the R8-LED (light-emitting diode) headlights -which are more durable than existing bulbs, add to safety in daylight driving, and give the car's face a new design element. The LED elements look like a string of pearls outlining the artistic three-dimensional headlights. "It's micro-design," says de'Silva. "When the daylight fades, we want people to see the personality of the car. It's in the headlamps and it's an Audi."