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Price of luxury just got more affordable

The Mercedes-Benz S300 diesel hybrid will start at $195,000 plus on-road costs when it arrives mid-year.

The starting price of the flagship Mercedes-Benz S-Class limousine has dipped below $200,000 for the first time in seven years.

The latest introduction to the Mercedes-Benz S-Class range, the S300 diesel hybrid, will start at $195,000 plus on-road costs when it arrives mid-year.

The last Mercedes-Benz S-Class to get close to this price was the S320 diesel in 2008, priced from $198,810 plus on-road costs.

There will be one other sweetener for plutocrats on a budget: the new S300 diesel hybrid sips just 4.5L/100km, not much more than a Toyota Prius despite weighing close to two-tonnes.

The S300 is powered by a 2.1-litre four-cylinder diesel engine matched to a 20kW electric motor that boosts acceleration from rest and when on the move.

It can reach the speed limit in a respectably brisk 7.6 seconds thanks to the instant torque available from the electric motor.

Australian versions of the S300 hybrid are due to go into production in April, with the first shipments arriving in local showrooms by June.

The new S-Class has made a flying start to the 2014 sales race, outselling the BMW 7 Series by more than two-to-one in the first two months of the year, and 10 times more than the Audi A8.

This reporter is on Twitter: @JoshuaDowling