In the heart of Italian racing car country, a motoring legend is being relaunched.

An all-new Bugatti rivaling the technical expertise, style and cost of the cars Italian designer Ettore Bugatti built mainly for royalty in the 1930s is nearing completion in Modena and orders are already flooding in.The prototype Bugatti, powered by a 3.5-liter, 525-horsepower, 12-cylinder engine, will be ready by December.

Production, to be limited to 100 cars a year, is expected to start next year, said technical director Paolo Stanzani. The automobile will combine performance worthy of a Formula One Grand Prix racing car with the comfort of a luxury sedan.

Although the body has yet to be designed, Stanzani has firm ideas about what the car will look like.

"It will be low and aggressive . . . It must maintain the flavor of an elegant, classy car, typical of the old Bugattis. It must perform well everywhere, on the road or on the track, but it must also be right for visiting the opera," he said.

"It will be impossible to confuse it with any other kind of car on the road," he added in an interview.

The price of the new Bugatti has not been disclosed but industry sources expect it be around $300,000, competitive with the current $276,000 on-the-road Italian price of the eight-cylinder, 478-horsepower Ferrari F40.

Milan-born Ettore Bugatti died in Paris in 1947 and his company, based at Molsheim, France, did not long survive him.

The new car is being built by Bugatti Automobili Spa, which was founded in October 1987 in Modena and is 65 percent owned by Luxembourg-based Bugatti International S.A., which owns the historic marque.

"The car was born of the determination of Bugatti International to protect the name and the image of the most famous car company in the world," said Stanzani, who is also chairman of Bugatti Automobili.

The V-12 engine, currently being tested at a new one-million-square-foot factory being built just 12 miles from Ferrari headquarters, would surely have pleased the late Ettore Bugatti, whose desire for perfection and beauty raised car-building to an art form.

The new Bugatti will sport a six-speed gearbox, four-wheel drive and a double suspension system that will allow the driver to switch from road to track performance at the touch of a button, Stanzani said.

It will be powered by four turbochargers - one for each group of three cylinders - and, like Formula One racing cars, two injectors for each cylinder to give a comfortable top speed of more than 185 mph.