Warburton points out that after the first generation A-class failed to hit 200,000 annual sales and made significant losses as the factory ran below capacity.
The second-generation car was expanded to two models (A and B) and the sales estimate to raised to 300,000 units per year. That target was also missed. Mercedes, Warburton claims,is planning to expand the third-gen A-class to four models and the break-even figures will be jacked up again.
It’s easy to see why Warburton concludes that Mercedes is unlikely to be third-time lucky with its attempts to build a profitable small car line.
His argument that Daimler needs to get into bed with a maker of high-volume front-drive platforms is increasingly compelling, particularly as sales of Mercedes' highly profitable large cars are hit by downsizing.
Warburton and his team have the same message for that other expensive line of premium small cars, Mini.
"We believe the cost structure of Mini remains barely viable. With bespoke tooling for the body, suspension and interior, Mini must struggle to amortize these costs over its roughly 200,000 per annum global production run. Engines come from a joint venture with Peugeot but the scale economics of the rest of the product look questionable."
The Mini, like the A-class and B-class, suffers from being an expensively engineered small car at a mid-market price. True, BMW is supposed to be talking to Fiat about merging the Mini 3 with the next Alfa Mito, but that may come to nothing.
In truth, any car that retails with a base price of less than £20,000 or so has to be part of high-volume platform family. If it isn’t, profits will be near-impossible to come by.
Both BMW and Mercedes will have to bite the bullet and realise that front-drive co-operation with other makers is inevitable.
They could, of course, work together on a Smart/Mini/Mercedes front-drive family of cars. But talks between the two companies recently broke up, with an agreement to do no more than share a few under-skin components.
In truth, BMW and Mercedes will have to swallow their pride and cut deals with other car makers, if not each other. If they don’t, heavy losses will be the inevitable reward.