The collaboration between the Daimler and the Renault-Nissan groups that began in spring of 2010 seems to be working better than expected, as the two automotive companies are now reportedly getting ready to add new projects to their partnership.

According to a news report from German business daily Financial Times Deutschland (FTD), Daimler is mulling building compact Mercedes-Benz passenger cars with partner Renault-Nissan from 2016 in Eastern Europe to further reduce development costs and increase production volumes.

Mercedes-Benz has already introduced the B-Class small MPV and the A-Class compact five-door hatchback, and plans to expand its offerings in the segment with at least three more cars including the CLA in four-door coupe and Shooting Brake variants and an SUV.

Autonews reported that the German brand aims to sell around 500,000 compact cars by 2015, up from 178,000 in 2011.

The Financial Times Deutschland report said that Mercedes would build the SUV alongside vehicles from Nissan’s premium brand Infiniti.

“Nissan is a good, respectable partner,” Metzler Bank analyst Juergen Pieper Pieper told Autonews adding that the move would not harm Mercedes-Benz’s reputation. “A jointly-built SUV makes good sense. Such customers aren’t as sensitive as S-class buyers,” he said.

The German news daily added that another vehicle being readied by Inifniti is the production version of the Etherea concept based on the Mercedes A-Class model.

According to FTD, further details on the two automotive groups’ plans are expected to be announced during the Paris Motor Show in September.

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