I would prefer a 3rd faction that is composed of Germany's major european allies Hungary, Romania, Italy, Bulgaria etc. And combine them into one faction which can include German units also.
I think it would make sense since these countries often fought alongside germans in whermacht command. There would slso be many options to put vehicles into the game which were lesser known during the war. The only problem is that the faction might be weakish late game.
Late game wouldnt be an issue if they could use prototype-like tanks (japanese Chi-Ri, hungarian Tas44M (basically a heavy Panther), etc) or German tanks (even KTs fought in Italy and Hungary), but all these nations had some kind of medium tanks/TDs and we see factions only with TDs and medium tanks ('murica, soviets) whose can only call-in heavier ones so maybe the 3rd faction could be the same. As the allies got the axis-like brits (my opinion), the axis can have an allies-like nation too.
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