Mercedes brand aims to expand its C-segment offering with the re- launch of the A-/B-Class (selling ~300k today), starting in 2011. Several new derivatives are imaginable, such as an SUV, Coupe or cabriolet of this line. Furthermore, Mercedes is expected to include this upcoming product into its new modular strategy, and scrap the stand- alone sandwich concept of today. It appears that Mercedes seeks a new low cost production site in Eastern Europe for this expansion of the line-up, which should help to further reduce unit cost. Like Audi and BMW, the brand continues to expand its product offering also in lower segments which puts ever increasing pressure on volume manufacturers, who suffers from less brand image and lower residual values.
It appears that the European market will continue to diverge to the two extremes, with both cheap entry level products (such as the Renault Logan) and premium offerings taking share from traditional mass market brands.