Mercedes-Benz’s parent company Daimler has a lot on its plate these days, such as the expansion of the compact car family and the development of the EQ electric sub-brand.

All this, however, are not enough to stop it from developing other products. AutoBild, for example, reports that they’re working on a brand-new supermini, which will slot under the A-Class and become their new entry-level model.

Referred to as the ‘A-City’, it’s expected to be underpinned by a shortened version of the A-Class’ platform and be offered as a three-door hatchback, although a five-door body style could follow.

The German website claims that it should have a starting price of approximately €20,000 (equal to ~$23,000) locally when it goes on sale in 2022, or about the same as the new Audi A1 and more than the MINI Hatch.

If it gets approved for production, it could be followed by a small crossover one year later. Tentatively called the ‘A-Adventure’, the subcompact SUV will slot under the GLA and should get a raised ground clearance and plastic cladding.

Normally, we would be skeptical about all this. Nevertheless, it seems to fall in line with a previous report, which stated that the Smart brand might be killed and Mercedes-Benz could replace it with a supermini, a small panel van and an on-demand shared transportation vehicle.

Note: Fourth-gen Mercedes-Benz A-Class pictured