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Can a shrunken C-Class cement Mercedes-Benz's lead in the luxury segment?

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Mercedes-Benz will expand its lineup of compact cars with a sedan variant of the next-generation A-Class, according to a recent report. The yet-unnamed model will fill the narrow gap that separates the CLA and the C-Class.

The first A-Class sedan will be to the C-Class what the CLA is to the CLS. In short, it will be positioned as a smaller, more affordable model aimed at buyers who want a compact Mercedes that is not as stylish as the curvaceous CLA. The model is being developed to fight head-on against the 1 Series Sedan that BMW exclusively builds and sells in China and the Audi A3 Sedan. That means its main markets will be the United States and China, though it will also join the Mercedes family in Europe.

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Across the pond, entry-level variants of the sedan will receive a gasoline- or diesel-burning four-cylinder engine borrowed from industrial partner Renault and tweaked in-house, according to British magazine Autocar. Upmarket variants will benefit from a Mercedes-designed 2.0-liter turbo four-cylinder engine, but more specific performance specifications have not been published yet.

The A-Class sedan lineup will also include a plug-in hybrid model powered by the aforementioned 2.0 liter, a compact electric motor, and a lithium-ion battery. The model will be capable of driving on electricity alone, which will help it gain access to China’s increasingly crowded urban centers. Alternatively, the AMG-badged, range-topping A45 will satisfy thrill seekers with a turbocharged 2.0-liter four-banger tuned to develop up to 400 horsepower.

Mercedes’ next four-door model will ride on the upcoming second generation of its MFA platform. Front-wheel drive — par for the course across the segment — and a six-speed manual transmission will come standard, and buyers will be able to pay extra for a nine-speed automatic transmission, 4Matic all-wheel drive, or both depending on the model they select. American enthusiasts who want a stick might be out of luck, however, because the six-speed is unlikely to make the trip across the pond.

The Mercedes-Benz A-Class Sedan will make its official debut either late in 2017 or in early 2018 and it will arrive in showrooms before the end of 2018. Expect a price tag in the vicinity of $30,000.