Gents - I have wondered about this a lot and even started an old post asking the question - what happened. In something called Quora.com which I have recently been enjoying, I may have finally found a good answer. You may not agree with this explanation but it seems right on to me:

From this fellow -

Profile photo for Baba Vickram Aditya Bedi
Baba Vickram Aditya Bedi
Top Writer 2018 Badge, Published in Yugmarg & Punjab Times. Question - what once reliable brand of automobile has lost its reputation for good quality?



Mercedes-Benz when I grew up was viewed as a car you bought to keep for a decade or more. I vividly remember how sales people would point out the use of real metal springs in the seats, Velour or MB-Tex seats which simply would not age if kept clean and moisture was maintained on MB-Tex materials. Even the upgraded leather seats were made more for durability than soft touch. The outside styling was a similar idea, from the paint which really pioneered the use of multiple coats with immense detail to durability, to the styling which used to evolve rather than to attract attention. The slow evolution of style made more immensely high resale value.


Then came the 1990s, and competition from Japanese Brands came. Honda’s by introducing the Acura brand in 1986, made a case for somewhat expensive Japanese Luxury Cars. Unlike their American Competitors, Acura did not miss the mark, and instead was a livable compromise for many, as it was a car with luxury features but one which was high quality and remained sporty. Though it was not as tank like as a Mercedes-Benz, nor as sharp in braking and handling as a BMW. But, in terms of size the Acura Legend was larger than both the B.M.W. 3-Series and the Mercedes 190e. In fact for the price of an entry level Mercedes-Benz, the Acura Legend was offering a fully equipped car that could be compared to the BMW 5-Series or Mercedes 300e. The price advantage was about $20,000 when compared to the later. For many buyers this was enough of a reason to go for the Acura. Even then the Acura had more standard equipment, and had ABS and a driver’s side airbag which had been a selling point Mercedes-Benz used to justify prices which were in the 1980s more than double a Cadillac or Lincoln by the time reaching mid-range Mercedes Models, and more than triple by the time the 560 SEL was approached. BMW and Audi were not in the same league as Mercedes-Benz in pricing in the 1980s.


Mercedes-Benz had a reputation which peaked in the late 1980s. The board at Mercedes-Benz certainly could not make the same mistake that the big three had made in the U.S., and they took Japanese competition seriously. The 1990 Lexus L.S. 400 was simply a car which bore an uncanny resemblance to a Mercedes S-Class, and addressed many of the perceived short comings of Mercedes-Benz. There were many customers who bought Mercedes vehicles but did so because there really was nothing else which matched their desires better on the market, this group was willing to switch brands if an alternative came. This demographic wanted a car which was not as Teutonic, had more gadgets and offered a moonroof as opposed to Mercedes-Benz which insisted on a standard sunroof without glass. Remember, Mercedes-Benz at this time was about durability and safety. A glass sunroof was just an item which was prone to eventual leaking, and by some logic a safety risk. In other aspects, Mercedes-Benz had a decidedly stiff ride, the Mercedes-Benz “thump” was liked by many owners but others simply tolerated it. There were quirks about Mercedes, and they ranged from lack of remote entry to not having a tilt steering wheel and even in high end models they only telescoped. Mercedes simply was not giving into trends. They adopted technology only as it became rock solid and not likely to reduce dependability. Lexus offered high quality if not the same durability, but at half the price. The Lexus L.S. 400 could not be compared to an American Luxury car like Cadillac or Lincoln, and it as intended was a Mercedes-Benz S-Class competitor. It was the first time in decades that Mercedes-Benz saw its vision challenged.


The end result was falling sales in the U.S., the Mercedes S-Class though a car with incredible pedigree, resale value and even better quality in a real sense was outsold. Soon it was happening to the entire lineup. The price advantage and more modern design of the Lexus L.S. 400 could not be discounted. My father test drove the L.S. 400, but a very bad experience at the dealership, was enough for him to stay with Mercedes. He did not find the lightness of the car appealing, the solid feel of the Mercedes was missing in the Lexus. Mercedes would continue to build cars the way they had for several more years, but by the early 2000s that Mercedes was visibly going away. They were going to take on the competition head on.


A continuous evolution of the Mercedes-Benz dashboard layout was used from 1973–1999.


2021 Mercedes-Benz Dashboard, while there are similarities between models, nothing is shared with Mercedes-Benz vehicles of the past.

Today, Mercedes-Benz builds cars which appeal to a whole new group of buyers. The difference between a Lexus, Infiniti and a Mercedes still exists but it is not as stark. The last holdout to a degree at least on a mechanical level were Mercedes Diesel engines which remained part of the Mercedes-Benz of the past. This is fast disappearing as the future is now electric. For some of us, Mercedes will be what it was in its golden age of the 1970s and 1980s. But for those who never knew the brand in that time as a reality it is hard to understand. The idea of what Mercedes-Benz really is about is completely different today. Mercedes-Benz actually is doing what Lexus began perhaps in a better way. A company which once did not even have trip computers, today has a MMI interface which really today is an artificial intelligence based robot. The idea of wondering what will happen when all this technology fails is no longer primary consideration. Mercedes entered the 21th Century to survive, and it has come back in sales volume and more than accomplished this goal. In doing so it lost continuity to its past in a real sense, but it successfully followed a trend which its customers had shown they were willing to do beginning in 1986, and showing full force after 1990. Had, Mercedes-Benz chosen to continue a slow evolution it would likely have become a niche player and its future would have been at stake.