FRANKFURT -- DaimlerChrysler is raising prices on the new Mercedes-Benz S class, its flagship model that is the best-selling luxury car of its class in the world, the German-American automaker said on Monday.
The overhauled S class, showcase of the group's most advanced automotive technology, goes on sale on Friday with the first deliveries scheduled for September.
A new S class with a six-cylinder, 3.5-liter gasoline engine packing 272 horsepower carries a price of 70,760 euros ($85,880) in Germany including value-added tax, a company spokesman in Stuttgart said.
A comparable vehicle in the previous S class costs 65,946 euros and has a 245-horsepower engine.
The price for a new, more powerful S 500 model rises to 89,668 euros from 83,694 euros. It has a new eight-cylinder engine boasting 388 horsepower versus 306 for the current model.
A 3.2-liter diesel motor for the new S class becomes available in the first quarter of 2006, as does the top-of-the line S 600 version with a 12-cylinder engine and 517 horsepower.
Success with the new S class is crucial for Mercedes-Benz's efforts to move beyond a series of quality problems that led this year to its biggest recall ever and to re-establish the brand as the car of choice for the well-heeled, analysts say.
"It is a symbol for being rich -- particularly in Asia -- and from that point of view the S class is going to be highly important for them," said Michael Raab at Bank Sal. Oppenheim, who this month raised DaimlerChrysler stock to a "buy".
Mercedes is up against stiff competition from German rivals BMW -- whose overall group sales of premium cars now surpass those of the Mercedes Car Group -- and Volkswagen's premium unit Audi.
Not only is the S class the most lucrative Mercedes product in terms of profit per unit and of margin, but it also serves as "the father of all technologies within the Mercedes brand", said Adam Jonas at Morgan Stanley, who rates the stock "overweight".
But all the bells and whistles mean nothing if the new car does not earn a reputation for reliability, he added.
"The consumer is watching now. The perceptions have caught up with the reality in terms of their quality and this one will be pretty high profile, especially because it is made in Germany," Jonas said. The new S class is longer, taller and more powerful than its predecessor, of which more than 470,000 units have been sold since it made its debut in 1998, including 53,200 units last year. That accounted for 5 percent of Mercedes-Benz global car sales.
By comparison BMW's top-line 7-series car -- four years younger than the S class -- sold 47,689 units last year.
Technical innovations standard on the new S class include a radar-assisted braking system that detects objects ahead and applies the proper amount of braking even if the driver doesn't.
Sharp braking also triggers the car to tighten the front seat belts and inflate air cushions that support the occupants. The side windows close automatically when an accident looms.
Two infra-red headlamps illuminate the road in the dark, detecting obstacles more than 150 meters ahead and relaying them to a dashboard display. Seats that massage your back at the touch of a button are optional.