BMW execs are reported to have given approval for development of a new crossover based on the 3-series sedan and upcoming X3 SUV. Likely to carry the F3 label, the new crossover model will be aimed directly at Mercedes B-Class range and should appear in showrooms by the end of the decade including US dealers.

The car first came under consideration back in 2004 but was put on hold due to a lack of resources and the ongoing development of several other key models. BMW’s new chairman, Norbert Reithofer, was reluctant to add another new BMW model but surging demand for crossovers both in Europe and the US has persuaded him.

“We’ve looked carefully at prevailing market trends, and there appears to be a clear shift away from old-style MPVs. By combining the high seating position of a SUV with the space afforded by a traditional station wagon, crossovers appear to be providing a clear alternative to buyers,” a BMW insider told AutoWeek. “Our goal is to bring a CUV to market offering the best possible dynamics.”

The F3 will ride on a modified 3-series platform and share components with the X3 as well. It will come with both RWD and xDrive AWD configurations, with power coming from a range of four and six cylinder engines. The rendering above gives us a preview of what the new F3 could look like, but BMW's developers are yet to sign off on the final design.