Why does the Audi A1 have such a small engine?

I noticed that the Audi A1 only comes with a 1.0-liter engine, which seems quite small for a luxury car. Is there a specific reason for this?

The Audi A1 is designed as a compact hatchback, prioritizing fuel efficiency and handling over raw power. The 1.0-liter engine is adept at providing enough power for city driving and is also more environmentally friendly.

While the Audi A1's engine may appear small, it still produces a respectable amount of power thanks to its turbocharger. This allows for a more efficient use of fuel and a smoother driving experience.