Mercedes-Benz is apparently preparing for a new line of models to slot below the A-Class, to better compete with MINI.

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Whenever the good folks at Daimler hear about European overcapacity, they ask: “Why can’t we have some of it?” Daimler’s compact cars are so popular that the plants in Rastatt, Germany, and Kecskemét , Hungary, are already bursting at the seams, and will even more so once the new A-Class starts shipping in fall.. Therefore, Daimler outsourced A-Class production to Valmet, the Finnish contract manufacturer. (Read More…)

“A stands for attack,” pronounced  Dieter Zetsche, CEO of Daimler Benz, in Geneva, With a quivering stach, Dr. Z unveiled Daimler’s new attack dog, the new A-Klasse. (Read More…)

Ever get the feeling that the car game is dealing with some malaise? Dieter Zetsche sure seems to. “The definition of luxury will be somewhat different,” Doctor Z tells the Wall Street Journal. “It will be fewer CO2 emissions and more modesty in appearance.” And this from the company that sells cars on the back of a brand dripping with immodesty and ostentation. But no matter, the decision has been made: Zetsche wants to chase what the WSJ terms “Americans’ growing interest in downsized models that offer upscale features and finishes.” Wait, growing interest? The MINI sells decently, but the A3 (fewer than 3k units sold year-to-date) and 1 Series (fewer than 10k units year-to-date) are hardly setting the luxury segment on fire. Damn the torpedoes, people want green modesty, and Zetsche’s going to give it to them with four compact models planned for the US sometime after 2011.

For sure, there will be another B-class, which will be pretty similar, address the same customer as the B-class today. The three other body styles clearly intend to target additional and different segments from the one that we can target today, including gender barriers.

Smaller, greener and more identity-politics-y. That sounds like just what the luxury market has been begging for! And we haven’t even started in on the cost-cutting yet.

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