TheMercuryNews.com's view

HALF MOON BAY – The new Mercedes-Benz ML350 and ML500 are more than the long-overdue second-generation sport-utilities they seem to be.

* They’re the German automaker’s latest chance to prove that its quality problems are behind it.

* They are the first in the series of new SUVs that will arrive over the next year or so. That’s the big reason that this M-Class only has two rows of seats, not three as was a choice in the first one.

* And they are platforms for bringing innovations — things like a seven-speed automatic transmission, a non-traditional gear shifter and headlights that turn when the steering wheel does — closer to the mainstream luxury market.

It has been 12 years since Mercedes announced it would build a luxury SUV in the United States. In 1996, it showed the AAV concept at Detroit’s auto show. Construction finished at the brand’s plant in Vance, Ala., in that year, and the ML320 arrived in 1997 as a 1998 model. Since then, Mercedes has sold 600,000 of them — half to U.S. buyers.

That first M-Class, priced starting at $34,000, was selected as North American Truck of the Year by auto writers. It had body-on-frame construction, like many other truck-like SUVs of that era, but was one of the first SUVs to have independent suspension, which gave it more of a car-like ride.

“The vehicle ended up becoming the benchmark,” said Vince Piarulli, a product specialist at Mercedes-Benz USA’s New Jersey headquarters.

Mike Chung, an analyst with the edmunds.com auto-information Web site, said the original M-Class proved there was a market for car-based luxury SUVs.

“Lexus and Infiniti were the first to market luxury SUVs, but Mercedes saw the writing on the wall and was the first to offer the true first luxury cross-over,” he said in an e-mail interview.

But the first-generation M-Class ended up lingering on the market too long — eight model years, 1998-2005, a time when many new rivals arrived on the market and some competitors made changes more frequently. Its U.S. sales were down 14.5 percent last year.

The 2006 M-Class is new, but retains what Piarulli calls “character traits” from the original — its silhouette, especially.

“Everything else is modified, updated,” he said.

What’s new

The biggest change, perhaps, is that the M-Class now has unibody construction, a one-piece frame that gives it more car-like road manners. Both front and rear suspension setups are new.

It’s 5.9 inches longer, 2.8 inches wider and features a 114-inch wheelbase that grows by 3.7 inches. That translates into more front and rear legroom, Piarulli said. The back seats have a 60/40 split, and fold down more easily than in the past.

Gone, however, is the third row of seats. It was an option on the previous-generation ML350 and ML500 models. Also, the vehicle’s rear cargo capacity, with seats folded, is down slightly, from 81.2 to 72.4 cubic feet. That’s mainly due to the tapered design of the rear of the new M-Class.

The model lineup remains consistent. The ML350 comes with a new 3.5-liter V-6 that makes 268 horsepower and 258 pound-feet of torque — both numbers are up substantially. The 5.0-liter V-8 in the ML500 carries over, but it’ll soon be replaced. It makes 302 horsepower and 339 pound-feet of torque.

Both models come with a seven-speed automatic, a first in the SUV segment. It allows more precise shifting, and helps boost the vehicle’s fuel economy by 11 percent over the previous model. It’s now 16 mpg in the city and 20 mpg on the highway in the ML350.

New is what Mercedes calls a direct select column shifter, small and positioned just behind the steering wheel. It operates with a tap down (for drive), a tap up (for reverse) and a tap to the left (for park).

One benefit is that there’s now room for a larger, better cup holder that holds two 32-ounce (or one 44-ounce) drinks between the front seats.

“It took us 20 years, but we got the cup holder right,” Piarulli said.

The M-Class has permanent four-wheel drive, and gone is the two-stage transfer case with its low gearing. Piarulli said the new M-Class remains off-road capable, but he did point out that few owners ever leave the pavement. An off-road package with locking differentials and two-speed transfer case is a “possibility” for 2007 models, he said.

The ML350 has a starting price of $39,750, while the ML500 is $48,500. Add a $720 destination charge to each. The two models have different grilles — black on the ML350 and silver with chrome ribs on the ML500 — and the ML500 also gets bigger brakes, heated seats, bigger wheels and more.

Options include rear-parking assistance ($750), side rear air bags ($385), a DVD-based navigation system ($1,240), three-zone climate control ($750) and a power lift gate ($520).

An appearance package that costs $2,550 in the ML350 replaces the standard wood trim and leather seats with aluminum trim and alcantara, or suede-like, seats, and adds other items. There’s also an air suspension package ($1,575-$1,775) that allows ride comfort adjustments, enables the driver to raise the vehicle by three inches and adds adaptive shocks. The lighting package ($890) includes bi-Xenon head lights that swivel 12 degrees to further illuminate curves and fog lights that illuminate corners.

The arrival of the new M-Class, which went on sale in March, will be followed by the six-passenger R-Class later in the year. While Mercedes is targeting the M at older Gen Xers and younger Boomers with one child, the R-Class will be pitched to those with bigger families. It’ll be five inches longer than Cadillac’s Escalade SUV.

Piarulli said he expects 35 to 40 percent of the buyers of the new M-Class will be previous owners of the vehicle. Dealers will sell 20,000 to 30,000 units throughout 2005, and about 35,000 in calendar 2006.

Next year, Mercedes will add something that probably will be called the GL-Class. It’ll be a full-size SUV that will share the platform used for the M- and R-Class vehicles and also be built in Alabama.

Mercedes’ Alabama plant originally was 1.2 million square feet and employed 2,000 people. Now, after a 2004 expansion, it’s 3 million square feet and employs 4,000. By 2006, when it’ll make M-, R- and GL-Class vehicles, it’ll have an annual production capacity of 160,000.

Quality improvements

Mercedes’ quality has been dinged recently. Consumer Reports said in 2004 that the brand’s new-for-2003 cars, as well as its 3-year-old and 5-year-old models, all had more problems than average.

“The previous-generation M-Class had below average reliability in CR’s annual subscriber surveys,” said spokesman Doug Love. The magazine has yet to test the new model.

But J.D. Power and Associates 2005 Initial Quality Study, out this week, puts Mercedes back near the top, ranking it tied for fifth among 36 auto brands in problems per 100 vehicles after 90 days of ownership.

“They really are making strides,” said Neal Oddes, Power’s director of product research and analysis.

Piarulli admitted to some early quality problems with the first-generation M-Class, but plant upgrades and training has resulted in second-generation vehicles that are “nearly flawless.”

Despite the growth in the number of SUV models, the M-Class remains “crucial” to Mercedes-Benz in America, according to Chung, the edmunds .com analyst.

“The M-Class currently accounts for 17 percent of all Mercedes sales in the U.S. — hitting a peak of 23 percent in July 2002 — and should continue to be a strong seller,” he said.