German reports are claiming Mercedes will use a range of four-cylinder direct injection powerplants in its A and B-class replacements that were designed by France’s PSA Peugeot-Citroen for BMW’s Mini. The reports also claim the next B-class will replace the smaller A by spawning new versions, including three and five door hatches as well as mini-SUV, coupe and convertible variants.

The reports come from Germany’s AutoBild, which said the new cars will arrive by 2011 and that any deal with BMW and PSA will solely be for the engines and not for any shared platforms as previously reported. There was also a possibility Mercedes could share a platform with Fiat but the chances of this are unlikely.

Fiat Chief Sergio Marchionne explained to reporters that just because Mercedes reaches a deal with one party it doesn’t mean it would exclude making any other deals with other parties. “The fact that it might have found an agreement with other suppliers does not mean that it is not interested in Fiat,” he explained. “Mercedes needs a lot of engines, some of them from others and some of them from Fiat.”

The only official word from Mercedes is that it’s open for any deal that makes financial sense.