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by Jez Spinks

The prospects of a sub-$30,000 Mercedes-Benz have been boosted by the company’s admission that it is looking at cars smaller than the new A-Class hatchback.

Mercedes-Benz is in the process of rolling out a range of compact vehicles that are targeting younger buyers. It started with the new-generation B-Class in 2012, and was joined in March by the new-look A-Class.

They will be followed by a four-door ‘coupe’ dubbed CLA (below), launched this week in France before going on sale locally in late 2013, and a baby SUV called GLA.

The Mercedes-Benz A-Class was launched with an aggressive $35,600 starting price, while the CLA will offer a cheaper mid-size alternative to the company’s best-selling model, the C-Class.

Mercedes said at the international launch of the CLA that it is considering even smaller cars as part of its alliance tie-up with RenaultNissan. They would use the three-pointed-star badge rather than the Smart logo of the company’s city car subsidiary.

“We’re exploring it [cars smaller than A-Class] but it’s difficult for us to go into the B [city car] segment, and also from financial perspective [because of narrower profit margins],” said Mercedes-Benz’s head of development for compact cars, Hansjorg Schinke.

“With Renault-Nissan there are discussions going on, exploring opportunities, if there’s opportunity [to joint venture] or do it stand alone.

“They’re very strong in B segment vehicles, so the discussion is whether taking an existing platform or maybe to develop a new one together. Especially, Nissan is interested in [being] more premium, so interesting in getting a little bit in touch with Mercedes, so we’ll see where it’s going.”

UK magazine Autocar quoted a Mercedes insider in early March saying an SUV about the size of a Volkswagen Polo would be the first of the sub-A-Class models to go into production, by about 2016.

Mercedes and Renault-Nissan are already collaborating on various projects.

The next-generation Smart Fortwo (current model above) and Smart Forfour will share their platform and three-cylinder engine with the next Renault Twingo. Mercedes is also lending the A-Class (MFA) platform to Nissan for at least one compact model under its Infiniti luxury brand.

The last Mercedes to cost under $30,000 was a previous-generation A-Class (below) that was sold with a manual gearbox and limited features.

The company has admitted the old A-Class, however, failed to help reduce the age of the average Mercedes buyer, which at 55 is one of the oldest in the automotive industry.

Schinke said the new A-Class was already attracting new and younger buyers to the brand, mainly due to its new hatchback design.

“For the CLA we have to find out [whether it will lure younger buyers than C-Class], but with A-Class at the moment, 40 per cent of buyers are coming from a different brand.

“I think the advantage of the A-Class is the design language [similarity] to the Golf.

“At the moment [younger buyers] are more attracted to Audi and BMW because [they are]more spectacular, more attractive, so we want to get in there with young people.

“So starting with compact cars and then [those customers] hopefully move to C-Class and E-Class.”