Mercedes-AMG could build a baby sports car to take on the Porsche 718 as well as fill the void of the Mercedes-Benz SLK, which is expected to be phased out after the current generation.

Officials at AMG are yet to confirm that such a car is in the works, but Autocar, citing an anonymous source at Mercedes, reports that the car is in the planning stage.

“A lot of thought has gone into how Mercedes-AMG can better leverage its success in motorsport, particularly Formula 1 and endurance racing,” the source told the British rag. “One idea is a sports car that is relatively attainable financially and ideally suited to track day running, but it is just an idea and not a committed project right now.”

If given the green light, the car could go the mid-engine route like the Porsche 718, as well as AMG's upcoming Project One hypercar. And also like its intended rival, it could come in coupe and convertible body styles, and with four-cylinder power, Autocar reports. Other potential rivals include the Alfa Romeo 4C and Alpine A110.

Of course, developing a dedicated mid-engine platform for the car isn't a cheap proposition, especially considering that this isn't a volume model we're talking about. A possible solution could be sharing components with Mercedes' latest compact cars, namely the 2.0-liter turbocharged inline-4s destined for upcoming 35- and 45-series versions of the compact models developed by AMG.

AMG could also generate additional sales via the booming GT4 motorsport business. The tuner already offers a GT4 race car based on its GT sports car, but a lighter, more affordable GT4 racer with a mid-engine layout could prove more popular with customer teams.

Stay tuned.