Who says diesels can't be fun? With the oil-burning R10 racer and R8 LeMans TDI concept under its belt, Audi seems to be saying otherwise. Further proof is the brand's new A3 TDI Clubsport Quattro concept, debuting later this month at an Austrian VW /Audi festival.

Built around the revamped 2009 A3 three-door, the TDI Clubsport Quattro blends the new car's styling with that of a DTM series racer. We see Audi's distinctive grille and LED running lamps up front, but the car looks almost race-ready. Already lowered by 1.3 inches, the Clubsport Quattro concept has a mean stance thanks to a widened track (1.3 inches in front; 1.8 inches out back), bolt-on fender flares and 20-inch alloy wheels. The interior isn't forgotten, either; custom racing buckets coddle front passengers, who also experience customized dash trim and leather padding.

But the heart of the TDI Clubsport Quattro lies with the diesel motor itself. Starting with the 2.0-liter direct-injection turbodiesel I-4 available in the European A3, A4 and TT, Audi revised the motor's induction, exhaust, and fuel injection systems to wring out more power. The result is a motor that cranks out 224 hp (112 hp per liter), and a walloping 332 lb-ft of torque at a miniscule 1750 rpm. That's an increase of 54 hp and 74 lb-ft over the production engine.

Predictably, power is transferred to all four wheels via the legendary Quattro all-wheel-drive system, channeled through a six-speed manual transmission. Along with rowing his or her own gears, the driver will be able to electronically dial in settings for the car's acceleration and suspension characteristics.

Audi says the car will reach 62 mph in 6.6 seconds and hit a top speed of 142 mph while meeting the upcoming 2010 Euro5 emission standards.