Daimler wants more compact cars

Mercedes-Benz has made no secret of its desire to develop a new platform for its future A and B-Class models, and has even gone so far as at arrange formal talks with both Fiat and BMW over a possible deal to share development. It’s now been revealed that Mercedes’ Smart brand also wants to expand its range by adding a second compact car based on a modified version of the ForTwo platform.

The Smart brand has just been launched in the U.S., with preorder sales already beating expectations, so it makes sense for Smart to add a second model and capitalize on the current movement by consumers towards smaller cars. You may recall Smart used to sell a ForFour model as well, and officials aren’t ruling out the possibility of a second-generation version.

Speaking with reporters from Germany’s DPA at this week’s Detroit Auto Show, Smart COO Rainer Schmückle said planners are still deciding on what the new model should look like and whether it should be badged as a Smart or a Mercedes-Benz. "It is all about watching how automotive markets develop and in which segments growth is taking place," he said. "We are considering placing it between the Smart ForTwo and the Mercedes A and B-Class."

A final decision on the future of the A and B-Class is expected to be made towards the end of the first quarter. The problem, Schmückle explains, is Mercedes needs to improve both unit sales and profitability of both models.