Mercedes-Benz is preparing to turn the luxury car class on its head by building a hybrid petrol-electric version of its next S-class. It is shaping up to be a sensational car, offering the economy of a family saloon with all the performance typical of Merc’s luxury cars.

Codenamed W221 and due to arrive at next year’s Frankfurt Motor Show, the sleek new luxury successor to the current S-class (pictured above) will come with the option of petrol-electric hybrid drive, according to supplier sources close to the German car maker.

The radical move is seen as a direct response to plans by luxury car rival Lexus, which has already revealed the RX400h – a hybrid version of the RX330 off-roader fitted with a petrol-electric drive system similar to that used in the Toyota Prius.

Mercedes’ latest hybrid system uses a V6 petrol engine and two electric motors charged by a nickel metal-hydride battery powering the rear wheels. According to a high-ranking insider, the package will endow next year’s S-class, with the performance of today’s S500 (0-62mph in 6.3sec), but with the 32.8mpg combined fuel consumption of the C200 Kompressor.

On top of this, the hybrid S-class will have remarkably low emissions. With a CO2 figure as low as 150g/km – less even than the new A170 hatch – it will beat today’s best S-class, the S320 CDi, by 44g/km. This would place the hybrid in the 17 per cent company-car tax band, compared with 27 per cent for the diesel version.

At this stage it is unclear whether production versions of the new S-class hybrid will retain the old 245bhp 3.7-litre V6 petrol engine or revert to the newer 272bhp 3.5-litre V6 first launched in the SLK earlier this year. However, it seems likely that the latter could be adopted, possibly in conjunction with direct-injection from German specialist Siemens to make Merc’s hybrid-drive system even more efficient.