From www.leather-dictionary.com - The Leather Dictionary
There are many products made of velvet leather worldwide. However, it is not a defined term and therefore no definition of a specific leather type. Suede or nubuck would be understandable because of their velvety surface. But the term is used for rough and smooth leather. Marketing efforts want the leather quality of velvet leather to be on a par with the high status of velvet within textiles.
The velvet leather in the Audi is a material with a coating. The velvet leather is available in the A3 as "design selection".
Velvet leather (coated leather) of the Audi A3.