Why Mercedes-Benz Will Build a Million-Dollar Sedan

Rolls-Royce too cheap for you? Mercedes may have your car.

Jul 23, 2014 at 6:31PM


Top versions of the Mercedes-Benz S-Class can already run well over $200,000. But the price of a rumored new super-high-end version could hit seven figures. Source: Mercedes-Benz.

A million-dollar sedan?

It's the kind of thing you'd expect from a hallowed name like Bugatti, or maybe Rolls-Royce. But if reports are true, the seven-figure level is one that Daimler's (NASDAQOTH:DDAIF) Mercedes-Benz brand could be aiming at soon. And believe it or not, the new million-dollar Mercedes could have some competition from other familiar names.

As Motley Fool senior auto specialist John Rosevear explains in this video, Mercedes is said to be planning a new top-of-the-line variant of its already-expensive S-Class sedan line -- and as crazy as it sounds, it's a product that actually makes a lot of sense for the old luxury brand.

A transcript of the video is below.

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John Rosevear: Hey Fools, it's John Rosevear, senior auto specialist for Fool.com. Daimler's Mercedes-Benz brand is headed upscale. Way upscale. You may wonder what I'm talking about, because of course Mercedes-Benz is one of the world's most famous brands of luxury cars, with models that are priced well into six figures. Well, how about seven figures?

Word is emerging that an all new version of the Mercedes S-Class sedan will be priced at around $1 million dollars, making it the world's most expensive sedan when it goes on sale sometime next year.

This is the S-Class Pullman, reviving an old name from Mercedes history, the old 600 Pullman that was a top-of-the-line limousine, and like that old Pullman the new one is essentially a ready-to-go limo for the very wealthy and very powerful.

There's a rear compartment with four plush seats that face each other, separated from the chauffeur's compartment by a thick pane of glass, and there's just about every amenity you can imagine, including armor plating.

For Mercedes, this will be the ultimate S-Class, which is itself the ultimate Mercedes sedan line. The S-Class was all-new last year, it has so far sold very well, and it's thought to be an extremely profitable product for Mercedes.

This new S-Class Pullman will make six variants of the new S-Class, up from three in the last generation. The others include a couple of coupes, including the new S65 AMG Coupe that was just announced. This is a great big heavy two door, super luxurious and super fast, with a twin turbo 6 liter V12 making 621 horsepower that is hand-built by a single expert technician, start to finish. They haven't announced pricing for that one yet, but it's expected to come in at somewhere over $200,000. But as expensive and exclusive as that is, the big Pullman will be a big step up from there.

I can't blame Mercedes for beefing up the high end of its product portfolio right now. As we're seeing more and more rich folks with money to spend all over the world, a brand like Mercedes-Benz that has the clout to get rich folks' attention pretty much everywhere is making a move to offer the very richest of them some very exclusive models.

It seems like a sensible strategy for Mercedes. We've heard hints of this from one of Mercedes' rivals, too. BMW (NASDAQOTH:BAMXF) is said to have its own big and opulent sedan in the works, a 9 Series, it showed a concept version earlier this year. Even General Motors' (NYSE:GM) Cadillac brand was said to have a super-high-end sedan in development at one point, though the rumor mill suggested that that was put on hold last year. 

And brands like Rolls-Royce and Bentley have expanded their own lineups, reaching down and up from their traditional market niches. It's certainly a great time to be shopping for a super-premium luxury sedan, there are more choices than ever, and if nothing else that should mean great profits for the companies that make them, including Mercedes. Thanks for watching.

John Rosevear owns shares of General Motors. The Motley Fool recommends BMW and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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