BMW has been winning accolades for shoehorning its 300hp twin-turbo six into the tiny 1-series range and Audi, too, has been offering torquey V6 engines in its A3 hatchbacks for years, but the closest competitor Mercedes-Benz has to these sporty compacts are the rather mundane A and B-Class line of cars. Tall and boxy, the A and B-Class fail to create much excitement, and it doesn’t help that they rely on a range of underwhelming four-cylinder engines.

The affordable sports car market can be very lucrative and it’s a segment Mercedes can no longer afford to ignore. That’s why for the next-generation A and B-Class models, due in 2011, developers want to inject some performance into the lineup, reports Auto Motor und Sport. The first step towards making the cars sportier has already been taken, with the decision to drop the expensive sandwich structure of the current models in favour of a new conventional FWD platform. This means the cars will sit much lower than current models, possibly even lower than the BMW 1-series and Audi A3.

There will also be several new versions of each model including sporty coupes and convertibles, a traditional hatchback and possibly a mini-SUV model. Power will range from about 122hp to 230hp and the engines will be borrowed from the current C-Class sedan or sourced from another carmaker, most likely to be BMW.

Other models in the works include a four-seater Smart car, designed to rival Volkswagen’s new up! minicar, as well as a new eco-friendly Smart car with an electric powertrain.