Audi's "uncompromised" ad theme has two goals. First, to show wavering customers they're not compromising when they buy an entry level A3 instead of a more expensive Audi. Second, to communicate the luxury automaker itself did not compromise when designing and building the A3.
Said Angelo: "This car is going into a segment with other vehicles at a $29,900 price point. Usually, a lot of manufacturers make a lot cost-cutting measures to deliver a product there. That simply wasn't the case with the A3. It's an Audi through and through."
The target market for cars such as the A3 and the CLA from competitor Mercedes are first-time luxury buyers, said Angelo. They're typically 30 to 40 years old in dual-income households with no kids. They make $75,000 to $100,000 annually. Audi's typical customers, on the other hand, are generally in their mid-40's and making over $150,000 a year.
On the other hand, European luxury nameplates are salivating over the prospect of luring new customers who previously bought Chevrolet, Ford, Honda or Toyota. Audi President Scott Keough told CNBC he expects sales in the entry-level luxury segment to grow 400% by 2020.
Angelo said he expects the A3 to conquest owners from Honda and Toyota as well customers from other luxury competitors such as Mercedes, BMW and Lexus.
"We think there's a lot of people who have been in volume brands who will now consider a vehicle at this price point," he said.
Mercedes was the first luxury automaker to dive under the $30,000 barrier with its successful launch of CLA last fall. The $29,900 price-tag seems to be the sweet spot to lure middle-class car owners who previously drove a Honda Accord or Toyota Avalon, say automotive experts.
"When you think luxury, you think expensive. But easy and cheap credit has made this segment relatively affordable for people who may have previously bought a mainstream sedan," said Jessica Caldwell, an analyst with Edmunds.com. "Now, they can start to get into this entry luxury segment. The car may be smaller -- but you get a more prestigious nameplate. Which makes it worthwhile for a lot of consumers."
Audi's sales were flat in February, while Mercedes and BMW gained 3 percent, according to the Automotive News Data Center.