Why Mercedes-Benz Is About to Show a Giant Super-Luxury Coupe

By Markets Fool.com

Image source: Mercedes-Benz.

Continue Reading Below

"Hot & cool -- Almost 6 meters of ultimate luxury."

That's all that Mercedes-Benz has said so far about the sleek coupe pictured above. The photo and caption popped up on Mercedes' official Twitter account on Thursday.

So what's this about?

A new ultra-luxury coupe from Mercedes-Benz?

That red coupe is almost certainly a concept car that Mercedes intends to show at the Pebble Beach Concours d'Elegance in California next weekend. Concept cars can be pure flights of fancy, or they can be close previews of upcoming production cars. This one is probably somewhere in between, likely intended to test the waters for a potential future model for Mercedes' ultra-luxury Maybach sub-brand.

Continue Reading Below

Mercedes didn't give us much to work with, but we can deduce quite a bit from what we have. If you look closely at the photo, you can see that there's a triangular Maybach badge visible on the car's rearmost roof pillar. The stated length is another clue: Six meters is a long coupe. For comparison, Rolls-Royce's big and opulent Wraith coupe is about 5.3 meters long, while Bentley's also-big-and-opulent Continental coupe doesn't even hit five meters.

That comparison with Rolls and Bentley is significant -- in fact, it's probably what this car is about.

Mercedes-Benz wants to extend its reach upmarket -- way upmarket

Mercedes' parent Daimler (NASDAQOTH: DDAIF) has made no secret of its desire to move the Mercedes brand's reach further upmarket. Its German rivals BMW (NASDAQOTH: BAMXF) and Audi parent Volkswagen (NASDAQOTH: VLKAY) own the Rolls-Royce and Bentley brands, respectively -- and Mercedes has been moving to compete head-to-head with both. Why? Profits: Ultra-luxury cars sell in tiny numbers, but the profit margins are very big.

So far, Mercedes' efforts to make a splash in the ultra-luxury realms haven't gotten a lot of traction. Mercedes' first attempt involved relaunching its old Maybach brand as a stand-alone competitor to Rolls-Royce and Bentley back in 1997. It failed to catch on and the effort was folded in 2013 afterseveral years of slow sales.

The Mercedes-Maybach S 600 sedan. Note the triangular Maybach badge on the rearmost roof pillar. Image source: Mercedes-Benz

The stand-alone Maybach brand had never quite managed toequal the cachet of Mercedes-Benz itself. Instead, it seemed to confuse customers. Realizing all of that, Mercedes reintroduced the idea by applying the "Mercedes-Maybach" sub-brand to a series of super-upscale versions of Mercedes' top-of-the-line S-Class sedans.

This red coupe will probably be Mercedes' first public step toward extending the Mercedes-Maybach lineup.

Why show it at Pebble Beach? Why not a regular auto show?

The Pebble Beach show isn't about new cars. It's one of the world's most important classic-car events, drawing huge crowds of well-heeled auto enthusiasts. Those discerning crowds present an opportunity for luxury-car brands to get immediate feedback on new ideas that are in the same spirit as the grand classics in the show.

General Motors (NYSE: GM) first presented the important Cadillac Ciel and Elmiraj concept cars alongside historic Cadillacs at Pebble Beach in 2011 and 2013. GM used the show as a platform to signal its intent to revitalize the Cadillac brand and move it upscale, an effort that is now unfolding. (By the way, Cadillac will also be unveiling something at Pebble Beach this year.)

That's probably what Mercedes-Benz has in mind here. That big red coupe probably won't go into production as-is, but Mercedes will use the feedback it gets from the crowds at Pebble Beach to gauge demand for a production version, and to refine the styling and features of other products it may have in the pipeline. For Daimler shareholders and car enthusiasts alike, it will be a very interesting effort.

A secret billion-dollar stock opportunity
The world's biggest tech company forgot to show you something, but a few Wall Street analysts and the Fool didn't miss a beat: There's a small company that's powering their brand-new gadgets and the coming revolution in technology. And we think its stock price has nearly unlimited room to run for early in-the-know investors! To be one of them, just click here.

John Rosevear owns shares of General Motors. The Motley Fool owns shares of and recommends Twitter. The Motley Fool recommends BMW and General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.