DETROIT – Aware that it needs to maintain the top-flight reputation of its famous quattro all-wheel-drive systems, one of Audi AG’s chief vehicle engineers says it will introduce a highly advanced form of quattro later this year.

Michael Dick, Audi’s head of Total Vehicle and Chassis Development, tells Ward’s at the North American International Auto Show here the auto maker will incorporate so-called torque-vectoring technology into the next-generation quattro system slated to launch later this year in Europe for the all-new A5 coupe, to be quickly followed by the eighth-generation A4 sedan, which comes to the U.S. in early 2008.

Both vehicles are built on the same all-new architecture.

Torque vectoring takes all-wheel drive to another level by varying drive torque not just between front and rear axles but also between wheels on the same axle.

By adjusting torque side-to-side, a higher degree of handling performance can be achieved by delivering more torque to the outside wheel in a turn, turning the vehicle more sharply and precisely into the corner.

Torque vectoring also is a way to enhance safety, in effect an “active” form of the brake system-based vehicle stability control systems now common for many vehicles.

Dick says the next-generation quattro with torque vectoring will retain Audi’s longstanding Torsen (torque-sensing) center differential to apportion torque between the front and rear axles, but adds a differential on the rear axle, incorporating electronically controlled clutches, to selectively apportion torque between the rear wheels.

Dick says Audi began testing its torque-vectoring quattro system early last year, and engineers will be ready to launch the system with the new A5 and then in performance-oriented S and RS variants of the all-new A4 sport sedan.

Dick says the torque-vectoring quattro system, combined with Audi’s introduction of an active-steering system, will deliver “driving dynamics as no Audi (has) before.”

Torque vectoring, Dick says, “will be a way to eliminate understeer, particularly on high-grip roads. It imparts a very neutral driving dynamic.”

Despite the traction-enhancing benefits of quattro, Audi vehicles long have been criticized for their tendency to understeer – a cornering situation where the front of the vehicle tends to “push” away from direction of the corner.

This has put Audi at a disadvantage when compared with rivals such as BMW AG, whose common vehicle architecture is rear-wheel drive, a layout widely considered to be more responsive and performance-oriented.

In 2006, Audi launched its third-generation quattro system with a Torsen center differential designed to bias drive torque between the front and rear axles at a default ratio of 40% front and 60% rear, which imparts a handling character that more closely replicates that of a RWD layout.

The new 40/60 quattro bias is used for the RS4 and other performance-tuned models, while mainstream Audi vehicles retain the standard quattro 50/50 bias. Dick says the next-generation quattro with torque vectoring also will use the performance-oriented 40/60 center-differential bias.

The new-generation quattro AWD and the new active steering system, which is designed to help the driver steer in crucial situations, were developed internally as a project named “charisma.”

Dick does not say which other vehicles in the future Audi lineup will be fitted with the torque-vectoring AWD, but says it likely will be used, at least initially, for “high-end” vehicles such as the performance S and RS variants of its A3, A4, A6, and A8 sedans, as well as the TT coupe.

However, he does not rule out use for the new Q7 cross/utility vehicle, although he says torque-vectoring technology is best suited for powerful, high-performance cars.

To date, the only auto maker to launch production vehicles with torque-vectoring AWD is Honda Motor Co. Ltd.’s Acura mid-luxury division.

Acura calls its system Super Handling-All Wheel Drive and currently fits the SH-AWD system as standard equipment on its RL sedan and RDX and MDX CUVs.

Other auto makers and driveline suppliers are known to be developing torque-vectoring systems that likely will see production in the near future.