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JAY RAMEY

Why the Mercedes A class is coming after a 20-year wait

The Mercedes-Benz A class has been different things at different times during its relatively short life span. The nameplate is 20 years old, and for all 20 of those years, Mercedes has declined to offer it in America. Until now. Automotive News reported that Mercedes will introduce the upcoming A-class sedan in the U.S., positioned below the CLA-class sedan in the most affordable side of the brand's lineup.

But how did the upcoming A class change Mercedes' mind after all these years?

Jay Ramey is an associate editor with Autoweek, an affiliate of Automotive News.

The original W168-generation A class debuted in 1997 as a small and very tall upright hatch looking like a large four-door Smart. The innovative engineering allowed for a very short nose and overhangs while maximizing interior space -- it was a car designed for European cities where space is at a premium. The first-generation A class sold well despite an early stumble: Mercedes had to recall all debut models after several weeks of sales to revise their suspension and fit them with stability control systems after journalists in Sweden rolled one car in an elk-avoidance test.

But the original A class won a following thanks to a versatile interior and thrifty engines, even inspiring competition in the form of the Audi A2, Renault Megane and Volkswagen Touran, among others. And like a number of other Mercedes models, the A class was never offered in the States as it was deemed to occupy a segment that simply did not exist and was not in demand; the U.S. market was preoccupied with SUVs of ever-increasing size at the time. (Sound familiar?)

The second-generation A class debuted in 2004 and mostly kept the pocket-size, multipurpose-vehicle profile of the original, pulling the small Mercedes in a more hatchlike direction. A two-door model was offered for the first time to compete with other tall hatches like the Volkswagen Golf Plus and a number of small French hatches and MPVs that had come to rule the segment. Mercedes has softened up the suspension of this second-generation model, once again offering a range of thrifty four-cylinder engines, starting with the 2.0-liter diesel A160CDI and the 1.5-liter gasoline A150 and topping out with the 2.0-liter gasoline A200 Turbo. This segment did not attract any followers in the U.S. at the time -- despite a fairly significant hike in gas prices around 2005 through 2007 -- and absent demand for this model, Mercedes chose not to offer it in the States.

The A class became a traditional-looking hatchback only with the third generation, which debuted in 2012. This time around, Mercedes used the A-class platform to develop the CLA-class four-door sedan for the U.S. and the GLA-class pocket crossover, both of which were offered in AMG flavors. The GLA45 AMG, in particular, was effectively the closest vehicle to the European-market A class, given its hot-hatch handling and lower ride height compared to the standard GLA250 model. Collectively, the CLA- and the GLA-class models demonstrated the U.S. market's desire for small Mercedes cars, which had earlier been kept out due to a perceived threat of brand dilution due to price and interior quality, with the W203-generation C230 Sportcoupe reinforcing this belief for a number of years.

Even though the third-generation A-class hatch became a true VW Golf alternative, Mercedes did not deem it prudent to offer a hatch in the States alongside the sedan, still believing the U.S. could only absorb a four-door sedan even if the rest of the world wanted a small Mercedes hatch for its practicality. The CLA-class sedan, meanwhile, offered a cramped interior and a tiny trunk that gave the U.S. a small sedan with the three-pointed star but none of the versatility of the hatch. The CLA sedan initially enjoyed strong sales due to its novelty and $29,000 starting price, but toward the end of its product cycle, the novelty began to wear a bit as Mercedes introduced a small GLA250 crossover for about the same price.

With the impending debut of the A-class sedan following the lineup's redesign in the U.S. next year, Mercedes is still hedging its offerings, pointing to the C230 Sportcoupe as proof of Americans' aversion to luxury hatchbacks. We expect brand positioning still plays a role in decisions like these, with the upcoming A-class sedan viewed as an entry-level luxury model rather than a bare-bones sedan positioned below the CLA class. The timing of the decision is curious, however -- the market is once again heading for large SUVs as it did in the mid-1990s.

The difference this time around may be the fact that the CLA- and GLA-class cars actually proved to Stuttgart through sales figures alone that it's worth fielding small cars, as long as they don't try to take the VW Golf head-on. The GLA45 AMG can still spray gravel in the Golf's face from a much higher price point, but neither it nor the A-class hatchback will win over budget hatch buyers, especially at the cost of brand perception for the company. This is why a sedan still makes sense to Mercedes, knowing that it's best to not compete with much cheaper hatchbacks.

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