Report: Mercedes-Benz X-Class Subcompact Shuttered

Still without a vehicle to compete in the premium subcompact segment, Mercedes-Benz will reportedly abandon plans to build an X-Class subcompact in partnership with Renault-Nissan. Automotive News reports that the X-Class project will be canceled as far as the Mercedes-Benz brand is concerned, leaving room for Smart to possibly expand down the road.

“We had a long debate about whether we should expand Mercedes into the B [subcompact] segment and we decided this is not going to happen,” Daimler CEO Dieter Zetsche (pictured) told Automotive News. “There is a possibility that Smart could… but we have not decided that yet.”

European bureau chief Georg Kacher reported last year that the subcompact X-Class was intended to slot in below the Mercedes-Benz A-Class. At €20,000 (roughly $27,440), the X-Class would have slightly undercut the €24,000 A-Class. Production was estimated at 100,000 to 150,000 annual units.

Two body styles, including a crossover (sized like a Buick Encore) and either a sedan or a small hatchback, were destined for Europe, China, and North America. Nissan-Renault was to provide the modular architecture used for the Nissan Micra and Renault Clio, although Mercedes-Benz engines were planned.

Apparently it would have been too tough to make the X-Class profitable in a competitive European segment. In the U.S., Zetsche has proven with the CLA-Class that it’s possible for a relatively bargain-priced Mercedes-Benz to take off. Still, it’s hard to imagine the three-pointed star venturing any deeper below the $30,000 price point.

Instead, Mercedes-Benz will continue to move forward with its small-car initiative without the X-Class, leaving the segment to the Audi A1 and BMW-owned Mini Cooper. Although Smart could potentially grow into the segment at some point, for now it will rely on the next-generation of its Smart Fortwo and Forfour microcars. Sharing 70 percent of its parts with the Renault Twingo, the rear-engine, rear-wheel-drive Smart Fortwo and Forfour are rumored to debut at the 2014 Paris show in September.

Only the Smart Fortwo will go on sale in the U.S., probably by August 2015. Also entering the U.S. market this summer on the small side of the Mercedes-Benz roster is the $42,375 B-Class Electric Drive, which will compete with the BMW i3 electric car.

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