In response to increasing competition in the luxury segment with the launch of the new Mercedes S-Class and BMW 7 Series, Audi is preparing to give its flagship A8 sedan an update with fresher styling and upgraded tech. Earlier this month, we caught Audi testing a prototype of the upcoming A8 facelift, while the updated S8 was spied testing for the first time just last week.

Now, our spies have spotted Audi testing a third new A8 variant that will offer new levels of luxury. Audi has already confirmed plans to build a more prestigious A8 designed to compete with the Mercedes-Maybach S, with reports claiming it will revive the Horch nameplate, a German luxury brand that joined the Auto Union group in the 1930s.

The camouflaged prototype appears to be based on the extended-wheelbase Audi A8L offered exclusively in China. A closer look reveals that Audi has applied camouflage to the rear side window, which raises our suspicions. None of the other recent Audi A8 prototypes had their rear side windows covered up, so there's a good chance a Horch badge is hiding under the camouflage.

Basing the Horch variant on the Audi A8L also makes sense since it will offer more legroom for rear passengers. Other visual modifications will allegedly include unique wheels and possibly a two-tone paint job when it's time for the production model to roll out.

Under the hood, the posh Audi A8 is expected to utilize VW Group's twin-turbo 6.0-liter W12 producing around 600 horsepower since we already know this unit is capable of generating 626 hp in the Bentley Continental GT and 650 hp in the Bentley Bacalar.

All that power will be sent to a Quattro all-wheel-drive system. The regular Audi A8 facelift, on the other hand, is expected to be offered with either a 3.0-liter turbocharged six-cylinder engine rated at 335 hp and 369 lb-ft of torque or a 4.0-liter turbocharged V8 with 453 hp and 487 lb-ft of torque like its predecessor, along with a plug-in hybrid.

The range-topping Audi A8 Horch will also be more powerful than the upcoming S8 facelift, which will likely produce 563 hp and 590 lb-ft of torque from a 4.0-liter twin-turbo V8 with a 48-volt mild-hybrid. It's unclear whether Audi's Maybach fighter will be offered in limited numbers, but we should find out later this year.