The allroad shares its platform with the second generation "C5" A6 Avant (station wagon), although an advanced air suspension, larger wheels with all-terrain tires and flared and unpainted bumpers give it a distinct appearance and more overall flexibility over varying terrain; Audi's quattro system is standard equipment.
Audi's 2.7 L, twin-turbo V6 was available initially, alongside the 2.5 L TDI Diesel engines with 132 kW (180 PS) and 370 N·m (273 ft·lbf) torque. A variant of the corporate 4.2 V8, shared with the A6 sedan, was made available in 2003, first in North America and later in other markets, and a less potent TDI followed in 2004.
The allroad was designed with the capability to tackle rough road conditions in mind; its standard adjustable air suspension system can lift the car high enough to provide 21 cm (8.3 in) of ground clearance and a low-range mode, absent from other quattro equipped vehicles, can be selected with the touch of a button. When used in conjunction, the two systems made it possible for the allroad to complete a Land Rover test-course, thus far it is the only car-based SUV that has been proven capable of doing so in testing. Conversely, the air suspension can lower the vehicle down to only 16 cm (5.5 in) above road level and simultaneously stiffen the spring and damper rates to provide a sporty driving experience much like that of the Audi S6. Many owners choose to fit their allroad with a sportier, road oriented tire to emphasize it's sporty side, as most owners will never venture onto terrain rough enough to necessitate having a tire specifically designed for off-road conditions.
Despite this versatility and generally positive word of mouth from owners and magazine reviews, allroad sales failed expectations in the North American market it was originally designed for, and most of its sales came from Europe, especially its native Germany. Its somewhat high price, lack of market identity in its segment and Audi's ambiguous advertising seem to have been the primary contributing factors; buyers who tend to normally seek either the more car-like look and ride of station wagons or the larger, less ambiguous styling of mid-sized, truck based SUVs tended to reject the allroad as being too little like either.
Sales had a slight increase in 2004, due to the availability of the less expensive Diesel engine, but fell again in 2005. Audi stopped production of the allroad in July of that year. Although the model continued to be available for sale throughout 2006 in Europe, there was no 2006 model year for North America.
Audi concentrated instead on launching the larger Audi Q7 SUV, which shares its platform with the Porsche Cayenne and VW Touareg, while a smaller and sportier Q5 will fill the niche of car-based SUV. Audi announced in the spring of 2005 that a new allroad Quattro, based on the new A6 Avant (C6/F4), would enter production after 2007, and it is expected that this model will return to North America.
Audi are planning to release a new Audi allroad Quattro Concept car in 2007/2008. The concept is powered by a new version of Audi's 4.0-liter V8 turbo-diesel and incorporates the original allroads height level adjustment. With a brand new image, Infrared scanners (black ice detection), computer lane discipline aids and a more refined diesel engine incorporating common rail fuel injection technology, the Concept seems to have given the allroad a promising future.