Sep. 3--TOKYO -- Mercedes-Benz Japan Co., an arm of Daimler AG of Germany, released the S-Class hybrid sedan Thursday, becoming the first foreign automaker to roll out an electric-gasoline model in the Japanese market.

The "S-Class Hybrid Long" is priced at 14.05 million yen and has about 30 percent better fuel efficiency than its previous model.

It is the first imported car to be eligible for the Japanese government's tax breaks for fuel-efficient cars.

The hybrid model from Mercedes-Benz' top-class luxury line, known also as S400 Hybrid, is already available in the United States and Europe from earlier this summer.

With the Japanese unit of Germany's BMW AG also planning to roll out a hybrid model next summer, foreign automakers are jumping into the heated hybrid race currently being driven by Toyota Motor Corp.'s Prius and Honda Motor Co.'s Insight.

The S-Class hybrid is equipped with a 3.5-liter, V-6 gasoline engine and a compact electric motor that is powered by lithium ion batteries, which are lighter than the nickel metal hydride batteries currently used in most hybrid cars.

The automaker also said its S-Class hybrid is the world's first series of hybrids to use these lithium ion batteries, which are installed in the engine compartment to secure enough luggage space.

While European automakers have long been more enthusiastic about diesel technology than hybrids, Mercedes-Benz Japan President Hans Tempel said hybrids have become a "buzzword" in Japan.

"From the marketing point of view, it seems to be easier to sell something which can refer to itself as hybrid," Tempel said at a press conference in Tokyo.

It remains uncertain whether the top luxury line of hybrids will be popular in Japan, where it has seen booming hybrid sales with a price tag of around 2 million yen. Even Toyota's new hybrid-only version of the luxury Lexus sedan, the HS250h, is priced between 3.95 million and 5.35 million yen.

But Tempel said he hopes the increasing lineup of hybrids and other eco-friendly cars from various automakers will help to stimulate a shrinking domestic market, where many young people have lost interest in purchasing cars.

"If the environmentally friendly technology succeeds in creating a new fascination about cars, that would definitely see a push for car sales," he said. "That's what we desperately need in Japan."

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Copyright (c) 2009, Kyodo News International, Tokyo

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