It’s widely reported that Mercedes-Benz is looking for a partner to develop the next range of A-Class and B-Class compact cars but until now it was thought BMW was the only potential target. Latest reports suggest Fiat is also in talks with Mercedes but in a move sure to engender knowing smiles in lawyers around the globe, both Fiat and Mercedes-Benz have declined to comment on the situation.

Although it's also been rumored that Mercedes may drop the A-Class, which is perceived as an untoward excursion down-market, this (non) development with Fiat may herald continued life for the tiny car. Fiat has already entered a deal with Mercedes’ parent company Daimler AG to supply it with truck engines but this would be the first time the two carmakers would be involved in developing a passenger car, Reuters reports.

Regardless of whether a deal with Fiat exists, Mercedes has said it is open to partnership with other car makers “in certain fields and certain areas.” Only time will tell what exactly that means for Daimler’s two smallest luxury cars.