According to the latest reports, Mercedes has finally realized why its A-Class and B-Class compacts haven't been doing so well: they're boring, overpriced and underpowered... and that's a losing combination. So for the next generation of the two model lines that's expected around 2011, Mercedes is reportedly preparing to turn up the volume.

Although the next-gen baby Benzes will reportedly stick with front-wheel-drive, they'll sit lower to the ground – and save production costs – by ditching the expensive current models' sandwich platform. Whereas the 193-hp 2-liter turbo is currently the most powerful engine offered between the two related models, sources indicate that the top engine could offer as much as 230 hp, possibly sourced from BMW off all companies whose 1-Series Mercedes hopes to target with the sportier new A and B-Classes. Meanwhile, reports also suggest that competition from the up!coming Volkswagen models could compel parent company Daimler to bring back the previously slow-selling and subsequently discontinued Smart ForFour.

[Source: Auto Motor und Sport via Motor Authority]