In 1989, Audi was in a state of crisis in the U.S.. The 60 Minutes farce had caused them serious market share from the European import scene. Audi had always been a bit fringe with its expensive and seemingly underpowered turbocharged all-wheel drive executive sedans. Aside from that, the major competition had stepped up their game; BMW launched the quite attractive and popular E32 the year before, and upstarts Infinity from Nissan with their Q45 and Lexus from Toyota with what would become the standard – the LS400 – were entering the marketplace. While the BMW remained with its standard inline-6 rear-drive configuration in most E32s sold, the Japanese duo upped the game with powerful quad-cam aluminum V8s under the hood. In the case of the Lexus, Toyota steered towards refinement with adequate power – Nissan, on the other hand, pushed the performance level with a reported 280 horsepower cap on the 4.5 liter VH54DE engine which today many report as underrated by at least 30 horsepower. Audi had its work cutout to claw back market share against these new cars, and to answer it released an updated version of the venerable Type 44/C3 chassis. Now, truth told the Audi 100 (5000 U.S.) really was the basis for the design of most of the large executive sedans that followed – but five years after its introduction, being the first was no longer enough. Audi upped the game by introducing what effectively was two Volkswagen 16Vs mated to each other in the same way that the 944 engine was effectively half of a 928 V8. The new V8 was all-aluminum and featured double-overhead cams. It was small – twice the displacement of the Volkswagen 16V engine at the time at 3.6 liters, but produced about the same power as the 4.0 liter Lexus motor. New too was the transmission in the now named “V8 quattro”, with a 4-speed automatic gearbox coupled to all four wheels through a rear Torsen differential and a multi-plate clutch center differential. The automatic was necessary to compete with the crowd that was buying these large executive sedans, as was the upgraded interior with a new dashboard, more sound deadening and more electronics. Of course, if you still wanted to shift gears yourself, Audi offered what many consider to be one of the best on-the-fly all-wheel drive setups ever to make it to the road; the 5-speed V8 quattro featured a center and rear Torsen differential. Less than 100 made it to U.S. shores in 3.6 form only, making these complicated executive sedans sought out by Audi enthusiasts across the country:
