Go back a decade or two and the notion of luxury, to most customers, meant a large car. But with fuel prices rising, emissions regulations restricting, and cities congesting, more buyers are looking for smaller cars that don’t skimp on the luxury.

Upscale automakers have, in response, been making smaller vehicles, and in greater variety. And chief among them, you could argue, is Mercedes-Benz, which is now preparing to launch its fourth-generation A-Class.

Spotted by our paparazzi at CarPix while undergoing testing in its native Germany, the MkIV A-Class is still pretty well hidden from our prying eyes with that shape-concealing (though form-fitting) camouflage. But we’re already getting an idea of what it’ll look like once Mercedes is ready to show it to the world.

Despite its compact orientation, the next-gen A-Class appears to have grown in size once again, offering more space for passengers and cargo, and easier access thanks to a larger tailgate aperture. We can also expect an array of gasoline and diesel engines to be offered, with three-cylinder and possibly even a plug-in hybrid version to follow.

Of most interest to performance enthusiasts, however, will be not one, but two AMG versions, in similar style to the 43 and 63 versions we’ve seen of the C-Class and E-Class, for example, or the 63 and 65 versions of the S, SL, and G. In this case we’re anticipating an A40 with about 340 horsepower and a new A45 with upwards of 400. (Given the larger apertures, tailpipes, wheels, and low-profile rubber, this would appear to be one of those AMG models.)

That’s not all Mercedes has in store for its smallest models, though. A sedan version is expected to launch in China, while the same MFA2 platform is expected to underpin replacements for the CLA, GLA, and B-Class, with a new GLB crossover to join in as well. For better or worse, however, the notion of an SLA roadster never seems to have gotten off the drawing board.

Whatever follows, the A-Class hatchback will arrive first, and we’ll likely see the finished product at the Frankfurt Auto Show in September, with deliveries expected to commence early next year.

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