Among the German automakers, Mercedes has an interesting history of both performance and luxury. Because of it's roots (see Happy 125th Benz), it has always been associated with great luxury cars and grand touring sedans. However, it also has a much celebrated racing heritage from both the Pre-war, and the post-war eras. You would think then that they should have produced some cars which combine these two worlds to good effect. And you would be right. The SSK, and the 300SL are certainly proof of that. However, those were certainly limited production cars for the well heeled. In the late 1960s, Mercedes thought that they would produce a performance sedan for those with slightly lesser means than celebrities and crown princes. The result was the W114 platform.
Mercedes described the sedans from this platform as a driver's cars. In the late 60's, that was a description which might have been true to the owners of other Mercedes, Bentleys, etc, but tough to accept in any other circles. This was the heyday of some of the best sports car and sporting coupes ever produced by Jaguar, Porsche, Ferrari, Aston Martin, BMW, etc. BMW and Jaguar in particular were laying claim to the performance sedan space. But Mercedes had another target in mind; America. They sought to compete with the Cadillacs, Lincolns, and other luxury performance sedans as defined in the USA, which had a very different idea of how to travel fast in style.
The W114 platform was a completely new chassis introduced in 1968 and designed by Paul Bracq who also did the previous fintails, and the pagoda cars. The platform was also used for the smaller engined inline 6 cylinders of the 230 and the 250 sedans. But the 280 had the range-topping 2.8 litre inline 6. Measured against the US competition, the 280SE in particular was a superior choice on many fronts. It had the inline 6 producing 180 hp, it had good fuel economy, it was fairly price-competitive at $6600, and it easily out-handled any of the other US choices. Of course, it did not hurt that the W114 cars were around 1500 lbs lighter than a cadillac, and 40 inches shorter !! And then there was the interior. It had legendary Mercedes fit and finish, wood trim, good guages, luxurious leather, and helped to define the term "Executive Express".
There were two significant changes just a year following the introduction in 1969. The first was the introduction of Coupe versions dubbed the 250C/CE and the 280C/CE Besides being pillar-less coupes, they had some subtle sheet metal differences in the rear. They were clearly intended to be the "hotrod" of the platform. The second change was the introduction of Bosch D-Jetronic fuel injection. Clearly future performance and emissions were beginning to enter the thinking for US oriented vehicles. in 1970, the 280SE sedan gained the new 3.5 litre V8 boosting output to 230 hp. Both the coupes and the SE had no markings that screamed high performance. They began a long tradition in Stuttgart of producing "sleeper" cars that had subtle appearance changes, but big performance changes. Meanwhile, down the road a bit, another firm founded by former Mercedes engineers were beginning to produce not-so-subtle performance versions of Mercedes cars....
The ultimate verdict on the W114 cars was of course delivered by the buying public. They agreed that it was great value, and Mercedes doubled sales in 1969 over the previous year. The platform went on to include cabriolets, and of course being German, someone inevitably took them racing. They remained in production until 1976. They were still a very long way off from the numbers for the US big three competitors, but they did a lot to establish the combination of European luxury and performance that US automakers then chased for decades.