Speaking recently to Automotive News Europe Zetsche said, "We had a long debate about whether we should expand Mercedes into the B-segment [below the A-Class] and we decided this is not going to happen".
This effectively quashes reports, such as one in AutoBild in 2013, that Mercedes-Benz would offer a sub-A-Class vehicle, dubbed X-Class, to take the take on the Audi A1. In this scenario, the company's foray into ever smaller vehicles for its main brand would be made profitable by expanding Daimler's existing partnership with the Renault-Nissan alliance, which currently includes the Mercedes-Benz Citan van, essentially a Renault Kangoo with a new nose.
Had this plan of action taken place, the first model in the X-Class range would have been an SUV based on the Renault Captur. This would be followed up by a small people-mover based on the next-generation Renault Clio hatchback. Priced under 20,000 euros ($29,000) in their base spec, Mercedes-Benz was reportedly targeting between 100,000 and 150,000 sales per year of each X-Class variant.
Continuing on Zetsche said, "There is a possibility that Smart could expand into the sub-compact segment, but we have not decided that yet".
He didn't elaborate on when a larger Smart would appear nor did he speculate on which platform it would be based. The earlier AutoBild article stated that shrinking the A-Class was impractical due to cost issues, while the architecture for the rear-engine, rear-wheel-drive ForTwo, ForFour and Renault Twingo wasn't flexible enough to stretch into a Mini competitor.
This would seemingly indicate that any future large Smart would be based on a Renault-Nissan model.