Mercedes admits R-Class is a failure

"It has definitely not lived up to our original plans," Zetsche said in an interview. "We are in the early phase of thinking about the next concept. It might be a one-for-one successor to the R class or it could be different."

Mercedes-Benz initially planned annual production of 50,000 for the R class, with 25,000 vehicles slated for the US. The vehicle has never approached that volume.

In the US, Mercedes tried to increase sales by lowering the price by $5,000 and offering a three-seat second row, for a total of seven seats. Last year, R class sales in its main market, the US, fell 28 percent to 18,168 units.

"Our expectations were higher than the return," he said. "It was a lesson learned. There is a volume out there. Whatever we do in the future, it must be feasible."