Mercedes has announced that they are working on an affordable new coup1 and a junior four-wheel drive. The new model, set to be a competitor for the BMW 1-Series and Audi A3 will debut in 2011.

The new coupe, believed to be called CLA will replace the three-door CLC, which is based around the old C-class.

By positioning the new car as a coupé rather than a hatchback Mercedes-Benz will try to give the CLA an upmarket image, as well as justifying prices that are likely to start at the equivalent of £19,000 when sales get under way just over four years from now.

The CLA will be powered by a a new range of four-cylinder, direct-injection petrol and common-rail diesel engines. Unlike the units used in today’s A and B-class line-ups, they will be shared with other models in the Mercedes range. Power outputs will range from 120bhp to 200bhp.

Dieter Zetsche, known as Mercedes Benz boss, gave green light to the designers in creating a range of vehicles meant to compete with cars like Bmw 1-Series and Audi A3. The German manufacturer plans to create also a Bmw X1 competitor will boost sales to over 280,000 units per year.

The vehicle which will compete with Bmw, Audi and even the new Alfa Romeo Mi.To will be called CLA. The price of Mercedes CLA will be close to the competitors, approximately 22,000 euro. Of course the price of the car will definetely be higher for the sport versions and is expected to reach the 35,000 threshold.

“We want to expand the A-class and B-class line-ups to at least double that of today’s levels. There is great sales potential in the addition of specific new models.” Said the chief executive officer Rainer Schmueckle.