BRESCIA, Italy -- After thinking it over, Mercedes-Benz has decided not to build a car smaller than its A-class subcompact, Daimler CEO Dieter Zetsche says. But he says Daimler's Smart brand could extend its minicar lineup by offering a larger vehicle.
"We had a long debate about whether we should expand Mercedes into the B segment and we decided this is not going to happen," Zetsche said at a media event here. "There is a possibility that Smart could expand into [a larger-vehicle] segment, but we have not decided that yet."
He said it would have been difficult for Mercedes to be profitable with a car smaller than the A class, which is not sold in the United States. The segment includes vehicles such as the Audi A1 and a range of vehicles from BMW Group's Mini brand.
In Europe this summer, Smart will unveil redesigned versions of the two-seat ForTwo microcar and the four-seat ForFour. At about 138 inches long, the new ForFour will compete against minicars such as the Fiat 500 and Opel/Vauxhall Adam.
Last year, German magazine AutoBild reported that Mercedes was considering launching an X class -- a range of front-wheel-drive small cars priced at less than 20,000 euros (about $27,400). The cars would be designed to fill a gap between the Smart brand and the Mercedes A- and B-class subcompacts.
The magazine said Mercedes planned to develop the X class with the help of Renault-Nissan.