Mercedes is preparing a new compact SUV targeting the BMW X3, and spy photos of a test mule have been shot near the factory in Stuttgart, Germany.

The GLK fills a new niche in the Mercedes SUV line-up, together with the M-Class and G-Class. Like the SLK is a "kurz" (short) version of the SL roadster, the GLK is like a baby G-wagen. Based on the mechanicals of the next C-Class, the GLK's styling will ape the design of its big-brother GL, but on a smaller scale. The engine range is tipped to start (in the US market, at least) with Mercedes' 3.5-liter V6, with the mouthwatering possibility of a V8-powered GLK63 AMG in the cards at the top of the range, all driving through Mercedes' 7-speed auto transmission and 4Matic all-wheel drive.

Insiders expect the GLK to hit the market as a 2009 model, with a possible unveiling at either Frankfurt '07 or Geneva '08. As always, watch this space for more info as it emerges.

[Source: Edmunds Inside Line]