It would go head to head with the Audi A4 Allroad.

Mercedes was fashionably late to the rugged wagon niche as the E-Class All-Terrain pictured here hit the market only about three years ago. If a new report published by Autocar is to be believed, the Daimler company is working on a smaller and more affordable alternative by developing a C-Class All-Terrain that would go up against the Audi A4 Allroad and Volvo V60 Cross Country.

Imagining the versatile wagon is not all that difficult having seen how Mercedes modified the E-Class Estate to come out with its All-Terrain counterpart. Offered as standard with the 4Matic all-wheel-drive system, the new jacked-up wagon is expected to have a generous ground clearance and a slightly more rugged appearance thanks to additional plastic body cladding, front and rear skid plates, chunkier tires as well as other off-road-inspired elements.

Considering the regular C-Class Estate is already available with an air suspension, the All-Terrain variant is likely to be offered with the sophisticated Air Body Control system tuned for bumpy roads. In the case of the aforementioned E-Class All-Terrain, there are three selectable levels for the air suspension to enable a ground clearance ranging from 121 to 156 millimeters (4.7 to 6.1 inches).

Sales of crossovers and SUVs continue to grow, but Mercedes is well aware some people – including yours truly – would rather have a C-Class All-Terrain over a GLC. Turning a regular C-Class Estate into an All-Terrain likely doesn’t require a significant investment, and seeing as how Audi has demonstrated the recipe is profitable, it makes sense Mercedes wants a piece of the action.

The next-gen C-Class (W206) will probably debut at some point in 2020, with the wagon to follow shortly. If the report is accurate and an All-Terrain is en route, our money is on a 2021 release. Like it’s the case with the bigger E-Class All-Terrain, the new lifted wagon from Daimler won’t be a global product as only certain markets (Europe, mostly) where this niche is important are going to get the C-Class All-Terrain.