VARIOUS parts of the Daimler Chrysler group have suffered tough times in the past couple of years.

First it was Chrysler, the US arm of the company, needed massive financial support to help soften the blow caused by oversaturation of the US car market and cut-throat discounting by dealers.

Next up came Mitsubishi's well-publicised financial meltdown - a problem brought to a head when Daimler Chrysler baulked at pouring more millions into the trouble Japanese car-maker.

Then the group's Asian alliance with Hyundai unravelled in spectacular fashion.

Yet through all these travails, one thing could be relied upon.

The core brand of Mercedes Benz remained as strong as ever.

Buyers, it seemed, just couldn't get enough of the prestigious German marque.

But, while Mercedes is still far from a basket case, even that mighty badge seems to be showing the first signs of wobbling.

Although buyers have complained that some Mercedes models (principally the cheaper C and E Class cars) have not been as well-built as their predecessor, sales have held up pretty well.

But this summer something happened that has brought management up short.

The almost unthinkable happened.

For the first time in a decade, when the summer sales figures were tallied up, they showed that Mercedes had trailed in behind its arch-rival BMW.

To stop the rot, drastic action was required and Mercedes believes the best way to improve sales is with new cars. So we can expect a slew of models in the coming 12 months.

Heading the assault will be a version of the M-Class 4x4 due to break cover at the Detroit Motor Show in January. This makes sound business sense. Despite political sniping at four-wheel drive vehicles' poor exhaust emissions and wasteful fuel economy, the US remains the biggest market for such cars.

The M Class will be a world away from the model it replaces.

Mercedes engineers have spent many hours poring over the BMW X5 - their closest rival - to see what makes it tick.

TheM-Class will have a more carlike interior and better driving manners.

It will also be available with a new range of V6 and V8 engines - petrol and diesel. The performance arm of Mercedes - AMG - is also hard at work on an ultrapowerful variant for uber wealthy clients.

Buyers in the UK will have their first sight of the off-roader in the summer.

Before then, they will be able to get their mitts on the B-Class, a new departure for the group that will sit between the bargain basement A-Class and the C-Class executive saloon.

The B-Class resembles a larger and sportier version of the AClass and Mercedes has high hopes it will find favour with young families looking for a practical, well-made hatchback wearing a premium badge.

Looking further ahead, Mercedes is also working on a sixseater cross between a people carrier and an off-roader to be known as the R-Class. To be built in the US, the car will be sold in two guises - a "normal" R-Class and a stretched version with more space inside.

Other additions to the Mercedes fight back include a facelifted CLK coupe range and a new S-Class limousine that may have a petrol/electric engine option.

It may have lost the dominance it once enjoyed over BMW but Mercedes clearly has plenty of fight left in it.

Published: 20/10/2004