The Mercedes-Benz E-Class cars have been re-engineered from the axles up for the 2003 model year. Mercedes has redefined its traditional best seller with loads of new technology, a sensuously athletic new look and more youthful, vigorous driving dynamics. The E-Class has never been the biggest, fastest nor most technically sophisticated of the Mercedes-Benz cars, but it is surely the most recognizable Mercedes in the world. The company's mid-line E-Class luxury sedan is a fixture from Burbank to Berlin to Baghdad.
The E-Class was knocked from the top of Mercedes' U.S. sales chart in 2001 for the first time ever, replaced by the compact C-Class sedan and coupe. The switch, more than likely, is an anomaly. Since World War II, the E-Class has accounted for nearly half of Mercedes' worldwide sales. Without major updates since 1995, the outgoing E-Class might have grown stale in the buying public's eye, and it still averaged 50,000 sales annually for the past five years.

The importance of the E-Class in Mercedes' lineup brings an important benefit for consumers: The company spent four full years and nearly $2 billion developing the all-new 2003 model. By any measure, that's serious investment. Clearly, the company in Stuttgart is flexing its muscles for a real show of force. It appears BMW and Audi have cause for concern here.

The Mercedes-Benz E-Class comes in two variants, the more popular V6-powered E320 and the V8-powered E500. E320 ($46,950) comes loaded with the standard equipment buyers expect in this class, starting with fully automatic dual-zone climate control, a power tilt and telescoping steering wheel, 10-way power front seats, real walnut trim, a 10-speaker stereo, power windows with one-touch operation up and down, auto-dimming mirrors and rain-sensing windshield wipers.
E500 ($54,850) has been gaining sales ground on the E320 in recent years. For 2003, the V8's engine displacement has increased from 4.3 liters to 5.0 liters (hence the name change from E430 to E500), with a corresponding increase of 29 horsepower. Besides more power, the E500 adds standard equipment, including four-zone climate control with separate temperature adjustments for both sides of the cabin, front and rear, and the new Airmatic Dual Control suspension.

Our test car, an E500, came with several options, starting with the E-Class sport package (high-intensity headlights, dark-tinted glass and aggressive looking body cladding). It also had heated seats and steering wheel, a hands-free telephone package, the see-through, all-glass Panorama sunroof and a 420-watt Harman Kardon stereo upgrade with six-disc, in-dash CD changer. These extras brought the sticker to $62,405.
All the options on our E500 are also available on the E320, and there are dozens more offered on both cars. Popular choices include radar-managed Distronic adaptive cruise control, which maintains a set distance from cars ahead, and the Keyless Go system, which can unlock the doors and start the car by touching the door handle and gear selector. Parktronic obstacle warning helps with parking and enhances safety by alerting the driver to objects behind the car. Also available: GPS navigation, a DVD-capable in-dash information management system; voice operation for the phone, audio controls and navigation system; ventilated massaging seats; and solar-powered interior ventilation. This is a luxury car, so there's even a power trunk closer.

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By the first of the year, Mercedes will launch the mighty E55, performance-tuned by subsidiary AMG with a supercharged V8 producing 493 horsepower (and that's no typo). Expect a premium of at least $10,000 over the E500. The E320 wagon continues, though it will be built from the old E-Class sedan at least through 2003. A wagon based on the new-generation E-Class should arrive by 2004.

The new Mercedes E-Class is slightly larger than its predecessor. It's nearly an inch longer in wheelbase and overall length and it's a half-inch taller in overall height. Mercedes' mid-size sedan is also 50-100 pounds heavier, depending on the model. Yet the weight increase is hardly significant, given more standard equipment and improved crash protection. The 2003 E-Class is the first Mercedes to use aluminum body components extensively, starting with the hood, front fenders, trunk lid and front subframe.

You won't notice any of that when you circle the E and then step back for a critical inspection. What you'll notice is how handsome this machine is. Mercedes-Benz has put a new emphasis on styling of late, and the E-Class may be the best example yet. The E-Class looks like a smaller S-Class, only better. The four-headlight theme introduced on the previous E-Class, now the standard at Mercedes, has been refined to a more sophisticated level. The new E's front end seems lower, and it's more steeply raked. Every line from one end of the car to the other flows and blends. The new E-class is more fluid and graceful than the old, which seems doughty in comparison. The design produces an impressive 0.27 coefficient of drag (great for minimizing wind noise and maximizing fuel economy), but the look is the thing. It's stylish, for certain.

Our E500 wore a glossy, non-metallic deep gray topcoat, very German, very cool. The sport package is distinguished by its dark glass, aggressive-looking wheels and very low ride height for a standard sedan. In a week that included visits to restaurants, a 30-screen movie theater and open house at the local junior high, we heard the word gorgeous five or six times from passersby.