"Logically, it would be pretty good idea to carefully consider the vehicle for the U.S.,'' said Michael Schmall, managing partner for Planning Edge, a Birmingham, Michigan-based market-research firm. ``I question whether it would be successful because of the difficulty luxury manufacturers have in that segment.''

The decision will be made in the next two or three years. The new model, designed for the US market will cost less than an entire redesigned B-Class. "They will need to get the costs right, from a production standpoint, to overcome the currency exchange issue,'' said Michael Robinet, an analyst at CSM Worldwide Inc. in Northville, Michigan. The B-Class is built in Rastatt, in the state of Baden-Wuerttemberg, which has the highest labor costs in Germany.