Audi AG steps into the ring to challenge the likes of Porsche AG, BMW AG and Ford Motor Co.’s Aston Martin brand with last week’s unveiling of its all-new ’07 R8 sports car at the Paris auto show.

Designed from the outset as a serious contender in the $100,000 executive sports car segment, the R8 embodies the success of Audi’s all-conquering Le Mans racecars of the same name, while serving as a flagship for a brand that has been unable to match the pedigree of its fellow German auto makers.

First shown in concept form more than three years ago as the Le Mans Quattro, the R8 is a sleek, mid-engine, 2-seater aimed directly at the Porsche 911, BMW M6 and Aston Martin V8 Vantage.

Functionally, the R8 has the goods to match its grand aspirations.

A 4.2L FSI direct-fuel-injected V-8, borrowed from the RS4 sports sedan, sits longitudinally behind the passengers and is mated to either a conventional 6-speed manual transmission or an optional 6-speed automated manual.

Called R-tronic, the new sequential manual transmission is a refined version of the shift-by-wire “e-gear” unit found in the Lamborghini Gallardo. Gear changes are performed via a center console-mounted shifter or steering wheel-mounted paddles. There is no clutch pedal.

To better cope with the higher performance levels of the R8 vs. the RS4, Audi has fitted a dry sump oiling system to its 4.2 FSI mill. This keeps a steady supply of oil flowing to the engine during aggressive maneuvers, while also permitting the engine to be mounted lower in the chassis, thereby lowering the center of gravity, Audi says.

Output remains the same as in the RS4, with 420 hp available at 7,800 rpm. Peak torque of 317 lb.-ft. (430 Nm) is available between 4,500-6,000 rpm.

Combined with the standard Quattro all-wheel-drive system, Audi expects the 3,435-lb. (1,558-kg) R8 to blast to 62 mph (100 km/h) in 4.6 seconds and on to a top speed of 187 mph (301 km/h).

Audi’s aluminum spaceframe technology forms the skeleton of the R8 and embraces front and rear double-wishbone suspensions with standard gas-filled shock absorbers.

Audi says the standard R8 suspension offers an astonishing level of performance and comfort.

However, this is taken to the next level with the optional Audi Magnetic Ride active damping system. Utilizing magnetorheological fluid, the system can constantly vary the viscosity of the iron-laden shock fluid by altering the current to shock-mounted electromagnets, the auto maker says.

Audi’s all-new ’07 TT sports car also features the technology, supplied by Delphi Corp.

Overall, the R8 rides on a 104.3-in. (265-cm) wheelbase and is 74.8 ins. (190 cm) wide, 174.4 ins. (443 cm) long and 49.2 ins. (125 cm) high.

Outside, the R8 is instantly recognizable as an Audi, yet has a totally unique silhouette and stance.

Audi’s corporate single-frame grille adorns the front and is complemented by large, twin air intakes and jewel-like xenon or optional light-emitting-diode headlights. Audi says the LED headlights will be available toward the end of next year and are a first for a series-production car.

Other body jewelry and highlights include: standard 18-in. wheels (19-in. units are optional); LED taillights; polished, quad exhaust pipes; a speed-sensitive, retractable spoiler; underbody diffuser; and a glass engine cover with optional white LED display lighting.

In addition, a large side panel behind the doors forms part of the side air intakes and can be customized with body-color paint or other materials, such as carbon fiber.

Inside, the driver-oriented cockpit is designed to blend the look and feel of Audi’s race cars with the exceptional interior craftsmanship found on its road cars.

The vehicle also will have above-normal levels of comfort for such a high-performance car, Audi says, adding that the R8 has a 3.5-cu.-ft. (100 L) cargo compartment in its nose and enough room behind the seats to stow two golf bags.

As a high-end vehicle, the R8 comes with a myriad of standard features, yet Audi is going to great lengths to offer R8 owners a significant number of customization options through its Quattro GmbH specialty division.

Along with the optional acoustic parking system, rearview camera, navigation system, and 465-watt, 12-speaker Bang & Olufsen sound system, the R8 will be available with several different color combinations, interior trims and special components, such as unique wheels and high-end sport seats, Audi says.

The R8 is being built at a rate of about 15 cars per day in a special area of Audi’s plant in Neckarsulm, Germany.

Audi began taking orders for the car Sept. 28, with prices reportedly starting at €104,400 ($132,343) for manual transmission models and €111,790 ($141,706) for R-tronic-equipped versions.

Deliveries will begin in first-half 2007, the auto maker says.

Although European R8 pricing well exceeds that of the Porsche 911, BMW M6 and Aston Martin Vantage, all of which start below $100,000, Audi may adjust its strategy in the U.S. to better compete with the established players.

The RS4 sedan, for example, went on sale in Europe for €69,900 ($88,656), yet currently carries a base price of $66,000 in the U.S.