Mercedes' U.S. sales were up last month, thanks to a hot debut by the all-new CLA, which starts at just $29,900. Photo credit: Mercedes-Benz

Mercedes-Benz is an iconic luxury-car brand. But in recent quarters, its profit margins have trailed those of its longtime archrivals, BMW (NASDAQOTH:BAMXF) and Audi. 

That has put Dieter Zetsche on the hot seat. Zetsche, who gained some U.S. fame as Chrysler's CEO a decade ago, is now CEO of Mercedes-Benz parent Daimler (NASDAQOTH:DDAIF). One of his recent priorities has been to improve Mercedes' profitability -- something that could happen as soon as next year, he has said recently.

How will Mercedes make more money next year? As Motley Fool contributor John Rosevear explains in this video, Mercedes' product cycle is about to hit a sweet spot -- and that could give the venerable German automaker its most competitive, and profitable, lineup in several years.

Fool contributor 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.