Things may be ramping up considerably for the Daimler and Renault-Nissan partnership. According to a report, the alliance is considering jointly building compact Mercedes-Benz passenger cars in Eastern Europe, with the first cars set to roll off the line in 2016.

The models might include a compact Mercedes SUV as well as vehicles from Infiniti, the Financial Times Deutschland reports. Mercedes-Benz is already building its A-Class and B-Class compacts at its factory in Kecskemet, Hungary, and production of the CLA coupe is slated to begin there in 2013.

The German automaker is seeking to open up the brand to younger buyers, and is planning to expand its compact lineup beyond the A- and B-Class to five models – the coupe as well as a SUV and a shooting brake.

Nissan is also planning an European-built Infiniti premium compact, which will be based on the A- and B-class models. The Japanese automaker signed a MoU with Magna Steyr in May for the latter to build the car, beginning from 2014.

The report adds that the alliance – which is already planning production of Mercedes-Benz four-cylinder petrol engines in the US from 2014 – is set to reveal more details of its plans at the Paris Motor Show next month.

The alliance isn’t the only one expanding its scope, of course – GM and PSA/Peugeot-Citroen announced an alliance earlier in the year, and BMW and Toyota are cementing their working relationship with a host of programmes including engine supply, battery research as well as joint development of a sports car.