DaimlerChrysler has decided to build a successor to the Mercedes Benz A-Class but cancelled plans to develop a small Chrysler passenger vehicle for the European market, reports Automotive News Europe (17/7/00).

The fate of the `baby benz` was sealed at a management board meeting on June 26 and 27, in Stuttgart. Disappointing profit margins was considered one of the factors for the A-class` demise, with the vehicle set to be replaced by 2004.

Quoting a DaimlerChrysler manager, the report says that the company is to offer a premium small car, alongside an extended Smart model range and small vehicles from Mitsubishi. The Group`s small-car plans for the European market will not involve Chrysler, says the article.