Audi will offer a diesel engine on its second-generation TT premium coupe, company and industry sources say.

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Two years ago, Audi prepared a diesel version of the first-generation TT, “but the remaining life cycle was too short to recuperate the investment,” Wolfgang Hatz, head of Audi's engine and transmissions, said during a press event here.

Hatz declined to specify which diesel will be in the new TT, but he admitted the new model's engine bay is too narrow for Audi's 2.7- and 3.0-liter V6 diesels.

Most likely, Audi will use a more powerful version of parent VW group's 2.0-liter, four-cylinder diesel, which in current applications delivers 140hp and 170hp. The engine is used in models such as the VW Golf and Passat.

The TT's closest competitor, the Alfa Romeo Brera coupe, offers a 200hp, 2.4-liter, five-cylinder common-rail diesel.

The gasoline version of the TT coupe reaches dealerships in September.

The TT diesel is expected to appear after the debut of the TT softtop roadster, which is scheduled to launch at the Los Angeles auto show in November or at the Geneva auto show next March.

Sporty image

Offering a diesel variant would help boost TT sales. CSM Worldwide forecasts that a diesel version of the TT would account for up to 15 percent of the car's volume during its life cycle.

Audi won't say how many TTs it aims to sell, but CSM Worldwide projects that TT volume will be 57,000 in 2007 and 50,000 in 2008.

“A diesel engine in the TT makes sense because today's diesels are more fun to drive than they used to be,” said Henner Lehne, an analyst at CSM Worldwide's Frankfurt office.

Audi has sold more than 270,000 units since the TT's introduction in 1998. In 2005, Audi built 13,174 TTs, down from 23,605 the year before, according to market research J.D. Power Automotive Forecasting.

Audi wants a diesel TT to showcase the automaker's sporty image.

“If we win at Le Mans with our diesel race cars, it will prove diesel is sporty,” said Ulrich Hackenberg, Audi's head of concept development, at the TT launch in April.

Last month, a diesel-powered Audi finished first in the 24 Hours of Le Mans race held at the Circuit de la Sarthe near Le Mans, France.

It was the first time a carmaker won the prestigious annual endurance race with a diesel-powered car.

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