MERCEDES-Benz is in negotiations with leading daily rental and leasing companies to offer its radical micro car with a range of flexible rental options. Developed in conjunction with the Swiss makers of Swatch watches SMH, the Micro Compact Car (MCC) will be launched in continental Europe next year.

The revolutionary two seater will come with ultra-frugal three-cylinder petrol, diesel and ultimately electric power, and when the French assembly plant is running at full steam, 200,000 units could be built annually.

The 2.5-metre pocket-sized city car is expected to carry a £6,000 price tag when it goes on sale in Europe next year, but it could be the turn of the century before it reaches British shores. MCC is planning to offer potential customers a range of long and short term rental options designed to extend the Smart's appeal to people who don't want to be restricted by its compact dimensions.