Hybrid for Mercedes at any cost

Mercedes-Benz will introduce a hybrid model in Australia even if it doesn’t make financial sense for it to do so.

That is according to Mercedes-Benz Australia/Pacific Managing Director, Horst von Sanden, who indicated to motoring.com.au that the pioneering German brand does not intend to hand the local luxury hybrid market to its younger rivals.

They include Lexus - the first brand to release a hybrid luxury car in Australia, and Infiniti, whose petrol-electric M35h large sedan will be a direct rival for the former’s GS450h, while BMW and Audi will enter Australia’s premium-hybrid race by the end of this year.

“Without knowing exactly what they do and when they do it, I believe if our competitors can do [a large luxury hybrid car] and make a positive business case out of it we will be able to do it as well,” said Mr von Sanden.

“I there is a big enough demand that it's worth bringing this technology then we'll bring it. We make our planning based on customer demand and every customer understands that behind every decision there is a business case.

“But even if the business case only breaks even or is slightly negative, if it's still worthwhile doing it, we'll do it.”

Mercedes-Benz has two hybrid options in Australia, both of which would be direct competitors for the GS450h and M35h, as well as the BMW ActiveHybrid 5 and Audi A6 hybrid – both of which will arrive here by year’s end.

The E300 BlueTEC Hybrid, available in both sedan and wagon body styles, is being touted as 'the world's most fuel-efficient full-size model' with claimed fuel consumption of 4.2L/100km.

Its 150kW/500Nm four-cylinder diesel engine is paired with a 20kW/250Nm electric motor for a combined output of 170kW/750Nm and CO2 emissions of 109 grams of CO2 per kilometre (not much more than a Toyota Prius), yet can accelerate to 100km/h in 7.5 seconds on its way to 240km/h.

While the E300 is a diesel-electric proposition, the E400 Hybrid is a petrol-electric vehicle, combining a 225kW/370Nm 3.5-litre petrol V6 with a 20kW/250Nm electric motor to sprint to 100km/h in 6.7 seconds and a 210km/h top speed, while consuming just 8.7L/100km.

However, the problem for Mercedes-Benz Australia is the hybrid price premium, which could make either E-Class hybrid vastly more expensive than the model upon which they’re based – and therefore uncompetitive with key rivals from Germany and Japan.

“One of the key things for the future is new environmentally friendly technology and for that reason we will absolutely look into everything including E-Class hybrid. One point we have to consider is that a lot of that new technology does carry a certain price tag,” said Mr von Sanden.

When we suggested a $20,000 premium for the hybrid, he responded: “That is probably not the right figure to quote, but it will be a substantial amount. We're not talking $2000 or $5000, were talking a lot more.”

While the latest GS450h effectively replaces the V8-powered GS430 in the new Lexis GS range, BMW's ActiveHybrid 5 model attracts a premium of $7300 over the 535i sedan upon which it is based and Audi’s hybrid A6 is likely to follow suit.

Mr von Sanden admits Mercedes is yet to decide which hybrid E-Class to sell here.

“We haven't actually gone into so much depth because at this stage we feel it might be a bit early to commit to it. We'll certainly watch carefully how both technologies are being developed and make a decision then,” he said.

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