There's been some discussion about the C-class here. I had a chance to drive a brnad new C240 for 3 days as a loaner recently. Before that, I twice got a C230 Compressor (I think it was 99) as a loaner, with about 22K miles. The C230 compressor (99) felt much more solid, engine was obviously better, ergonomics inside were better, overall, it was a better car. I just didn't like the C240 - the interior is not that nice, some controls are awkwardly placed, engine is underpowerd, etc. I have also recently driven the Audi A4, A6, and the BMW 3-series. All of them (of course, A6 is in a different class) are much nicer than the C, even the A4. 2 of my friends drove the C, then bought the Audi A4. Two others bought the BMW 3-series, ditched the C. One bought a lexus ES300.
What is most revealing in a market place is the decisions consumers make, not what they say. Of course, not all customers are rational, but as a group, there is fair amount of rationality - not everyone is a fool, only few, maybe. So if many people are preferring the A4 and 3-series to the C, and the lexus, that says something about the product (and its pricing too). And this is just within the German brands. There are many others who are not so concerned about the brand, who don't even consider the mercedes C class. Mind you, my comments are restricted to the C class (and the M), not the E or the S. The E and the S are in a different category and price range, but the C - its not doing Mercedes proud. Its nowhere near the most desirable car in the 30-35K range.
I am not implying that people who buy the C are less informed or anything like that. Its just that fewer and fewer people are buying the C. The less brand conscious customers are going elsewhere. THose who REALLY want to own a mercedes are still flocking to the C. But brand values change, and nobody here would disagree what direction the Mercedes brand is headed. Maybe we'll soon see the E-class taxi cabs here as well, as they are all over Europe!