Meanwhile, Volkswagen's luxury brand Audi reported on Monday that it had sold 1.87 million vehicles in 2016, up 3.8 percent on the previous year but likely relegating it to third place.
In an interview with Reuters last 2016 in his office at Daimler's headquarters, he said that the company had "some deficits, cost and quality problems", and the design was "not top-notch", at the same time stating that Chrysler was no longer a premium carmaker.
Daimler is also preparing for a new era when the auto industry's business model moves beyond manufacturing and selling cars to luring customers interested in pay-per-minute transport solutions provided by self-driving cars.
"We've worked hard, and today we're leading or are among the leaders when it comes to innovation, quality, design and security", Zetsche said.
Daniel Binns a managing director at branding agency Interbrand, said advances in technology have made a product's scarcity less of a selling point.
"There is a close correlation between safety and well-being: a person who feels safe feels better; and a person who feels well drives more safely", said Anke Kleinschmit, Head of Group Research at Daimler.
Nissan announces new electric mobility solutions and autonomous driving at CES 2017
Both companies will test the vehicles for practical use as a pilot project by 2020 in the metropolitan area of Tokyo. Nissan has also given a preview of some of the next-generation Leaf's onboard technology.
Many of these ideas can be put into practice in current generation vehicles but as cars become more autonomous, the possibilities on board will become greater.
Rather than designing a limousine which appealed mainly to rear seat passengers, the new S-Class featured large digital display screens on the dashboard, a deliberate attempt to appeal to a younger, driver-focused audience.
The C-class sedan remained the highest selling Mercedes-Benz model for second year in a row, replacing the E-Class sedan as the top seller, since 2015. The main elements of success are attributed to the break-up in 2007 with Chrysler and the introduction of Gorden Wagener as the main designer. He introduced an elegant and sporty style to spruce up Stuttgart's Teutonic limousines.
All three German luxury-car makers face that challenge - along with increased competition from expansions by smaller rivals such Jaguar, Volvo and Alfa Romeo, and from new entrants such as Tesla Motors Inc.
For the past six years consecutively, sales have been on the rise for Mercedes-Benz, and for the first time in 11 years, it is set to overtake BMW in sales, becoming the world's number one luxury brand.
Following its philosophy of "the best or nothing", the luxury carmaker is finally reaping the rewards of what the CEO says is "the logical effect of careful preparation".