Let's revive a thread that's been dead for almost a year...

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Before reading this post (or at least part of it), I'd recommend reading (or at least skimming) these two articles...
http://www.intl-m-100group.org/6point3/magazines/caranddriver_oct1969/index.html
and
http://www.intl-m-100group.org/6point9/brochure/brockyates/index.html
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It seems that a lot of people don't give Mercedes in general enough credit as performance cars. In many places outside of the U.S., Mercedes are quite ubiquitous; they have a position as a status symbol in this country primarily because we only get the higher end models.
The history of fast Mercedes dates back to at least 1909, possibly earlier. But 1909 saw the construction of the
Blitzen Benz. Capable of reaching 125mph, and belting out a whopping (for the time) 200hp, the Benz was not only the fastest automobile in the world at the time, it was also faster than any airplane that had been built up until that point.
Moving forward to after the 1924 merger of Daimler and Benz, the 1930s, we have the
500K and the later
540K. With 160-180hp on tap, they were some of the fastest production cars of their day; the only cars that had any hope of keeping up with them were a handful of Duesenbergs.
The next really significant Mercedes performance car was the
300SL Gullwing, the racing version of which came out in 1952 (or 1953, I'm not sure which; Supercars says 1952, but I seem to remember it being '53). The racing version of the 300SL was, to the best of my knowledge, the single most successful racing car of all time, winning every race it ever entered except one-the first one-in which it came in second. The car was years ahead of its time, with a spaceframe chassis (thus the need for gullwing doors in the coupe) and an OHC inline 6 with mechanical fuel injection. Supercars quotes a 0-60 time of 8.5s, a 1/4 mile of 16s, and a top speed of 146 for the roadgoing Coupe; other sources have said that the 0-60 time can be anywhere from 6.9-8.5 seconds and the top speed anywhere between 130 and 170mph (don't quote me on the top speed figures tho) based on rear end ratios. Both the gullwing and the later roadster version (which had more power than the coupe did) were amongst the fastest cars of their day. The only serious competition they had that I'm aware of is the fuel injected Corvettes, the supercharged Thunderbirds, and the first Jaguar E-Types.
After the 300SL, Mercedes kind of fell flat on its face for a number of years. Throughout most of the 1960s they continued to make the safe, practical, reliable cars that Mercedes had always been known for, but they didn't have anything that was really, really fast in their lineup. Their top engine was a detuned version of the I6 in the 300SL, and put out something like 175hp. This was enough to propel the 300SEL sedan from a standstill to 60mph in 11-13s (depending on if you had one with a stick or an auto). That's not bad for the 1960s, but it's not anything to write home about either really. This changed in 1968 (I believe... god I wish I had my book on postwar Mercedes production models handy) with the introduction of the
300SEL 6.3. With the 6.3, Mercedes took the 6.3L, 300HP V8 out of their 600SEL Limousine and shoehorned it into the 300SEL body. The end result was a car that could take on many American muscle cars without breaking a sweat, and could still carry 5 people. 0-60 times seem to vary widely from car-to-car with the 6.3, with road tests of the day reporting anywhere from 5.1s with 3 passengers (Motor Trend, June 1968) to 6.5s for a Road & Track article. Whether this is just due to different test conditions, various test equipment, different drivers, one engine being more broken in than the other, or a significant variation in power output between 6.3s, I'm not sure. But it's safe to assume that a 6.3 in good condition is good for a sub 6 second 0-60 run, and a particularly healthy example might break 5s flat. Reported top speeds also vary widely, but the factory quoted 135 or 136, although the lowest I've seen reported is only 131. The lowest published quarter mile time I've seen is in one of my Mercedes books (which I don't have handy) and is something like 13.8 seconds. That's a fast car even by today's standards. Back in 1968 it could take on just about anything else on the road.
Beyond straight line performance, the 6.3 provided decent handling, thanks to an independent suspension. Unfortunately, the suspension also proved to be the downfall of used 6.3s (and regular 300SELs and SEs); it is an air suspension, and the bags don't age very well. The problem has since been solved with stronger aftermarket bags, but that one you see sitting on a used car lot that's drooping at all 4 corners because the airbags are shot is not the steal you think it is... fixing that suspension is an expensive proposition.
Back on topic, shortly after the demise of the 6.3 came the introduction of the
450SEL 6.9. This car used the same block as the 6.3, punched out to 6.9 liters. It was introduced to the U.S. market in 1977 with a M.S.R.P. of ~$40k (that's 1977 $$, not 2005 $$). The 6.9 was strangled by the emissions standards of the 1970s, and the US cars managed only 250hp. However, they also put out 380ft-lbs of torque. They were not quite as fast as the 6.3- 0-60mph came up in 7.1s with a top speed of 140 or 145- but having driven my dad's many times, I can testify to the fact that it is still a fast car. Especially for the era when it was made. In fact, the car is essentially on par (we're talking identical acceleration figures, +/- 0.2s to 100mph) with my car, which is an '86 560SEL. Thanks to the 3 speed transmission (1st is good for 65mph) the car feels sluggish until it gets up to about 40; get on it on the freeway at 80 and the car just ****ing GOES, and it does it without even bothering to downshift into 2nd. The 6.9 also handles EXTREMELY well for a 4400lb car. It has no shocks or springs in the conventional sense, you see. Both are replaced with a hydropneumatic strut at each wheel. The suspension is fully independent, and the hydropneumatics make it a semi-active suspension; the car exhibits far less body roll in corners than my 560SEL does (in fact, it exhibits very little body roll period), and it just responds faster than the 560, despite weighing several hundred pounds more.
The 6.9 was discontinued in 1981, and that was the end of high performance Mercedes in the U.S. for a few years. Europe got the 500SEL, SL, and SEC but they were never officially imported into this country; that doesn't mean you don't see them over here- there are a whole bunch that people unhappy with the performance of the 380s had imported- but they're all grey market cars. Fast Mercedes returned to the U.S. for 1986 with the 560SEL, SL, and SEC. The 560s had a 5.6L version of the all-aluminum M117 V8 that was rated for 238hp in the U.S. cars and almost 300 in the European cars. Now, I should point out that the U.S. rating is widely considered to be highly pessimistic. The European 560s did 0-60mph in 6.9 seconds; the U.S. cars did it in 7 seconds flat. Considering that the European cars are known to put out about 290hp, 265-280hp is a reasonable guesstimate of the ACTUAL power output of the U.S. cars.
Up until the introduction of the BMW M5 in 1987, the 560SEL was the fastest production sedan in the world. 0-60mph in 7s, top speed of 140mph (possibly 155 on the European models although I'm not 100% sure of that). Quarter mile time for the U.S. cars was 15.5s @ 90mph as recorded by Car & Driver in July 1987. I took mine to the drag strip last fall and managed a 15.7 @ 89, BUT that was with a reaction time of 0.45; with a decent reaction time it should be capable of a 15.2 or 15.3. This was fast enough that a 5 speed 1987 IROC-Z couldn't keep up (also noted by Car & Driver). Top speed was at least 140mph- Car & Driver recorded 140mph for a U.S. car but I've seen speedo pics from euro and american cars @ 160mph... and I highly doubt the speedo is 20mph off, as I got nailed for doing 60 in a 35 (I was in a hurry) and the speedo read exactly 60mph the whole time...
The 560 handles fairly well too... it exhibits vast amounts of body roll, but it stays stuck to the tune of 0.80gs (recorded, again, in July 1987 by Car & Driver). Should you choose to ignore the body roll and push the car to its absolute limit, you will find that, to quote Car & Driver (again), it "has a taste for lurid, tail-out slides". And I've confirmed that on numerous occasions with mine. Push it hard enough and it'll reward you with fairly benign, controllable oversteer. Take your foot off the gas and it snaps back into line instantly.
The successor to the W126 chassis (1981-1991 SEC/SEL), the W140, was roundly criticized by the automotive press for being a fat, overweight pig of a car. I won't dispute that- it weighs in at like 5500lbs- BUT the V12 powered 600SEL (later renamed to S600) with 389hp, while heavy, was still fast. 0-60 in 5.9s is not bad at all for a 5500lb vehicle. I can't speak to the capabilities of the 140 chassis 600s beyond that, except to say that the '94 S500 my grandparents owned was easily the most solidly built car I've ever seen.
This, of course, brings us to the present day lineup, which you guys already know all about. I didn't touch on every fast Mercedes-not even close-but those are the ones that impress me the most. Other notables include the 190E 2.3-16v (and 2.5-16v in Europe) and the early '90s 500E and the 450SLC 5.0 was a quick car for its day as well. If you've read this far, you obviously have an interest in these machines, and I'd recommend you read the two articles on the 6.3 and 6.9 I linked at the beginning of this post if you haven't already. If you don't "get" why I love these cars to death after reading them, you may be beyond all hope.
The links again:
http://www.intl-m-100group.org/6point3/magazines/caranddriver_oct1969/index.html
and
http://www.intl-m-100group.org/6point9/brochure/brockyates/index.html
Now that we've got performance out of the way...
What else is it that makes Mercedes the best cars in the world (imo)? Reliability and (in some cases), luxury. While build quality seems to have declined, especially on the cheaper models, since the merger with Chrysler, it's still generally quite good; Mercedes is the 6th most reliable brand of new car in the U.S. according to J.D. Power (or it was the last time I checked). And a well-maintained Mercedes will run for easily 200k miles; in fact, I would consider it to be highly ABnormal if it didn't hit 300k. 500k+ is not unheard of (or terribly uncommon) for gasoline engines, and diesel Mercedes have covered >1,000,000 miles.
As for luxury... my car is an '86; it has heated power seats in the front and the back (the back seat moves forward and backwards, and each side can be heated independently of the other) as well as the usual power steering, locks, a/c, blahblahblah. Seat heaters were offered on the 6.9, in fact, in the 1970s. Today's S class has heated and cooled power leather seats (front and rear) with a massage function in at least the front seats (I'd have to check the back seats in my grandparents' S600 tho, I don't remember if they have that feature as well), Bose audio (which is quite good, although not bass-y enough for my taste), GPS navigation, 4 zone climate control (driver, front passenger, left rear passenger, right rear passenger) and a 5 or 7 speed auto (depending on the engine you choose). The 600s and AMG 65s have ABC (Active Body Control) on the suspension, which is not radically different from the system on the 6.9, albeit significantly improved. The other S Classes have air suspensions. They have what Mercedes calls Distronic, which is a radar-based cruise control system that will slow the car down and alert you when there's a car in front of you that's going slower than you are (I'm 90% sure Mercedes was the first to market with this system). If the car senses that you might be about to make a panic stop, it ups the pressure in the braking system and moves the calipers closer to the discs to minimize stopping distance. And, of course it has GPS, traction control, stability control, and eleventybillion airbags.
The thing with Mercedes is that while they may not be the fastest cars in the world, they may not be the best handling cars in the world, or the most reliable, or the best looking, or the cheapest. They may not EXCEL at any one thing; what they DO excel at though, is doing 90% of the things they do better than 90% of the cars on the road. In other words, they excel at doing well in as many areas as possible, without necessarily being the best in any of them (although there are times when they are).
There's really only one car company that can match Mercedes move for move- BMW (of course). And supporters of both marques could argue until the end of time about which one is "better". Ultimately though, it comes down to personal preference. More often than not, the cars are so evenly matched that the deciding factors are things like styling and brand preference. I like both, I have no problem driving either one, but I grew up riding in, playing around, and working on Mercedes, and ultimately, that's what I prefer.