Audi is planning a small SUV crossover based on the next-generation A3, but VW’s Bavarian brand may have to find an alternative to the Q3 name because Nissan’s Infiniti has the commercial rights to the model badge.

Due within two years, it should be the third member of Audi’s 4x4 Q model family, joining the Q5, which is debuting in April, and the Q7.

Competing with Volvo’s planned XC30 in the premium sector, Ford’s mainstream Kuga and arguably Nissan’s Qashqai; the baby Q-car will be part of an unprecedented Audi model onslaught, which will expand its variant portfolio from 25 to 40 by 2014.

But Infiniti, which carried the Q prefix on its Q45 flagship and sells a large QX56 SUV in Russia, only allowed Audi to use Q7 and Q5 after an out-of-court settlement. It ruled that Audi could not use the letter on other models.

An Audi source said there had been “harmonious discussions since that agreement” while another insider revealed that prototypes of the “pocket cross-over” are running.

He said: “We have the platforms and powertrains which let us grow organically rather than force feeding the market with a narrower range.”

This year, Audi debut the A4 Avant in March and the Q5 in April, and begin UK sales of A3 cabriolet the same month. Facelifted A3 reaches showrooms in September. The B-segment A1 will break cover in 2008 and A5 cabriolet, Audi’s largest ever convertible, is due within 18 months.