Looks like the BMW 3 Series GT will have not one, but two premium rivals come 2016. First it was Audi that was said to have an A4 Vario in the works, and now Mercedes-Benz too is set to join the party with its own take on an executive premium hatchback based on the next-generation C-Class (current C-Class sedan pictured here).

German auto tabloid Autobild reports that the new model will revive the Merc C-Class SportCoupe nameplate that was last used in the last-gen W203 series. The short-lived three-door hatch was then rebadged as a CLC before being dropped in 2011. The new one will have five doors and will likely resemble the BMW 3 GT in shape and girth.

Little else is known so far, but the report says that it will be larger than the 2014 W205 C-Class, with significantly more head and legroom. The boot should see a big increase in volume too, making it the practical yet still stylish choice in the C-Class range. The traditional Estate will still go on as we know it, with the new variant targeted at a completely different market sector.

If these rumours all prove true, it looks like the BMW 3 GT is BMW’s own industry trendsetter that has its rivals scrambling to react to, much like the Mercedes CLS did in 2004. What do you all think: is Mercedes-Benz expanding in the right direction?