Mercedes-Benz plans to sell up to 10,000 subcompact "city cars" a year in the United States starting later this decade, the company's top U.S. executive reports.

Michael Bassermann, president of Mercedes-Benz of North America Inc., also said the company's goal is to build its U.S. sales to 100,000 vehicles a year.Mercedes sales will exceed 70,000 here this year, he said.

"We're starting a new product offensive," he told automotive reporters in Detroit.

The German automaker will begin building sport-utility vehicles in 1997 at a new plant under construction in Vance, Ala.

Mercedes' U.S. sales peaked in 1986 at about 99,000, before the Japanese carmakers entered the luxury market and the United States added a tax bite to high-priced cars. Last year's sales were about 61,900, and the total hasn't been above 70,000 since 1990.

The city car, known as the A-93, was introduced as a concept car in 1993, and Mercedes said it would start building them in 1997.

The concept car looks like a mini-minivan, with a short hood and engine components under the floor. That configuration could make it easier to produce an electric-powered version of the car.