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Click above for a high-res gallery of the 2009 A class.

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Click above for high-res gallery of the 2009 Mercedes-Benz A-Class

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It's no secret that the Mercedes-Benz A-class hasn't been a resounding success and that the automaker is looking to revamp its entry-level line-up to better compete with rivals. According to Autocar, M-B boss Dieter "Dr. Z" Zetsche has green-lighted a new model that's taking aim at the BMW 1-series and Audi A3, and will accompany the rest of the revised A-class models when it debuts in 2011.

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Auto Bild is reporting that Mercedes and BMW may consider collaborating on subcompacts in the coming years. BMW's keeping an eye on the MINI plant in Oxford, England. If the factory doesn't run at full-tilt, BMW takes a monetary hit. Shacking up with Mercedes to build the next generation A-Class at MINI's facility and on the MINI platform would keep production humming right along. Other potential partners have been mentioned as well, such as Honda and PSA. Mercedes and BMW are working on hybrid

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