Mercedes E 300 hybrid ideals

Mercedes-Benz Australia won't disclose a sales forecast for its new diesel/electric E-Class, the E 300 BlueTEC, which goes on sale here in August. But there is a business case for the hybrid – it's not coming here just to promote Benz's technical abilities.

In Europe last week for the presentation of the new E-Class to the Australian media, motoring.com.au asked David McCarthy, Senior Manager Corporate Communications at Mercedes-Benz Australia to explain why the prestige importer is introducing the hybrid to a local market that seems more receptive of diesels than hybrids. Will it be a technology leader perhaps, or a vehicle calculated to change the perception of hybrids in the market? Mr McCarthy believes the E 300 can be both, but in any case the car is here because there is qualified demand for it.

"We're a technology company, and we want to showcase that technology," he replied.

"[But] We've pushed very hard in Australia and New Zealand to get that hybrid [E 300]. Whether it will be a sales success, I don't know. Our sales goal is not ambitious – and no, I'm not going to tell you how many. But we've had to make a business case for that car... we're looking to get some good sales with that car – not huge."

The difficulty in marketing a car such as the E 300 is that it's hard to justify on the strength of fuel consumption and environmental factors alone, when the purchase price could be literally tens of thousands dearer than the E 250 CDI – a conventional diesel that is nearly as economical.

"One of the challenges is the fuel economy gain with that car is about one litre per hundred kilometres, over an E 250," said Mr McCarthy. "And there's an added additional cost, which we haven't locked in yet. It's probably not as high as initially we thought – or that we feared. There is a case to showcase the technology, but when we've spoken to customers, there are customers who would like to be able to buy it. That, and there's been pressure from a number of automotive journalists: 'Why don't you bring this car here?"

Currently the E 250 CDI is priced at $101,500, versus $136,485 for the E 350 CDI. Mr McCarthy told motoring.com.au that the diesel hybrid would fall somewhere in between the two conventional diesels in price. If price of the new E-Class range remain more or less static, and the E 300 is closer in price to the E 250, as Mr McCarthy hinted, it's still a potential price premium of $17,000. That's a lot for the saving of about $300 a year at the pump.

Benz will be banking on the several consolidating factors to sell the E 300. There's the usual environmental 'feel good' factor for one, allied with the badge pride that goes with owning a technological wonder. More prosaically perhaps, the E 300 provides better power delivery and refinement than a conventional diesel – including Benz's own E 250 CDI. And there's much to be said for the known hybrid virtue of silent running in electric-only mode in built-up traffic. The difference in fuel consumption in the urban environment would quickly widen in favour of the hybrid model – although not enough to make up that difference in purchase price.

That purchase price, however, is bound to remain considerably less than the price of the E 350 diesel – and along with any specification tweaks in the hybrid to compensate in part for the premium over the E 250 – that's another reason the E 300 might be a qualified sales success. By implication, Mr McCarthy clearly expects the hybrid model to find buyers where the E 350 diesel has failed to do so.

"[The E 350 diesel] is a bit niche, it hasn't sold as well as I would like, because it's a ripper car," he said.

But the performance gap between E 300 and the V6-engined E 350 isn't that close, so it's not like buyers will be getting V6 performance for a four-cylinder price, to put it simplistically. The 0-100km/h time for the hybrid – at 7.1 seconds – is half a second slower than the V6 and about 0.4 seconds faster than the E 250. Performance alone then is not the issue – and Benz is content with that, says Mr McCarthy.

"I think where hybrid has lost some traction is where hybrid is used as a performance aid rather than as an economy and emissions aid. Now whilst that's good, if you want performance, I think hybrid performs absolutely best when it's there to reduce emissions and reduce fuel consumption – and still provide the level of performance people are used to.

"That's been our focus with hybrids; other manufacturers have taken a different direction.

"That's not to say that [Lexus and BMW] are wrong; but our view is different.

In a mild swipe at other manufacturers the Benz exec overtly questioned the definition of 'performance' hybrids.

"There are people that make hybrid cars that are focused on performance. Perhaps the next thing they should do is make the chassis to match it."

'Performance' hybrids typically provide the means to change the public's perception of a brand or else gain a larger foothold in the US market, where diesels haven't been popular. That is certainly true of recent arrival in the Australian market, Infiniti.

"[The Infiniti M35h] hybrid is definitely focused on performance," Mr McCarthy said. You look at the fuel economy of their range and it's nothing to write home about.

"That's a choice they've made – and we respect that. For us, hybrid is more about one, showcasing the technology, and two, delivering better economy and lower emissions.

"Performance? Well I think we've got that wrapped up with AMG. We don't need two engines in a car to make it go."

Nonetheless, prestige buyers first and foremost want performance from their new purchase, so there's every chance Benz's preoccupation with environment as hybrid's reason for being will narrow the target audience.

"Don't mistake me," Mr McCarthy responded, "the E 300 has a very good level of performance – but that's not the focus of the vehicle. The vehicle is about having an incredible range, about having a level of performance people want, low emissions, low fuel economy and great technology."

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