The next-generation of Mercedes-Benz’s S-Class flagship limo -including the high-performance AMG models- which is due to go on sale in Europe in 2012 and in North America the following year, could be offered exclusively with hybrid powertrains if the company’s bosses get their way.

According to a report from Autonews citing inside sources, the premium automaker’s board is considering the shift to hybrids and the elimination of models with only internal-combustion engines for a number of reasons.

These include to help meet tightening European CO2 emission and tougher corporate average fuel economy standards in the United States, as well as to highlight the company’s hybrid technology and to compete against Lexus which is considered the leader in premium hybrid vehicle sales.

However, some of Mercedes-Benz’s U.S. dealers are not liking the idea of a hybrid-only S-Class range as they believe that hybrids are “not perceived as true performers in the market” and that the switch “would change the perception of the brand.”

Tommy Baker, chairman of the Mercedes-Benz dealer board and a Charleston, S.C., Mercedes dealer, told Autonews: “The most important thing in the American market – regardless of hybrid, lithium or electric cars – is that we Americans are different than any market and we are going to want those gasoline engines. For S-class buyers the goal is not gas mileage.”

Currently, Mercedes-Benz offers only a mild-hybrid version of the S-Class, the S400 HYBRID that uses a 279HP 3.5-liter V6 petrol engine, a 20HP electric motor installed in the torque converter housing between the engine and the 7-speed automatic transmission and a set of lithium-ion batteries. The car cannot be driven on electric power only.

If Mercedes-Benz’s board gets its way, all version of the next S-Class including the AMG variants, will be full-hybrids capable of operating in electric-mode only.

According to an inside source, a decision by the company’s board is expected within three months.

Via: Autonews (Sub. Req.)