It looks like Mercedes is testing the waters with two hybrid concept cars. DaimlerChrysler showed two S-Class hybrids at the International Auto Show in Frankfurt, Germany in September, 2005.  One is a gasoline version and the other a diesel.

The gasoline version, called the S350 DIRECT HYBRID, uses a  3.5-Liter V6 along with a high-torque electric motor. As much as a 25% reduction in fuel use is claimed.

The diesel, called the S320 BLUETEC HYBRID, uses a new 3-litre V8 diesel. The company claims a 20 percent reduction in fuel use, or about 34 MPG. With a horsepower rating of 350 HP, the emphasis seems to be on performance first, then an improvement in economy and emissions.  Like diesels that Mercedes sells in several European countries, it uses a particulate filter to reduce soot. DaimlerChrysler says the car will be able to meet tough California emission requirements.

DaimlerChrysler says their strategy is to make gasoline cars as efficient as diesels, and diesels as clean as gasoline cars. At this stage, the company has not announced putting the cars into production.