Four years and $1.3 billion later, DaimlerChrysler AG's new Mercedes-Benz C-Class hits European dealerships in May and the U.S. in September.

Mercedes is betting on better handling, interior improvements and new engines in the '01 C-Class to make up some of the lost sales ground it has given up in recent years to the more popular BMW 3-series sedan. U.S. sales of the 3-series were up 34% in 1999 (77,138 units vs. 57,520), while C-Class sales declined 13.7% (29,770 units vs. 34,487).

Mercedes delayed the debut of the C-Class several times last year because of development and production problems, analysts say. DC officials, however, won't comment.

Unveiled last month at Mercedes-Benz's Sindelfingen, Germany, plant, the sleek new C-Class is more rounded and aerodynamic than its predecessor, but retains the familiar Mercedes elliptical headlights.

Mercedes says the C-Class is packed with industry-leading safety features, including dual-force front air bags, curtain and side air bags and sensors that can detect when a specially-equipped Mercedes baby seat is in the passenger seat.

Two V-6 engines will power U.S versions of the C-Class, a 2.6L and a 3.2L. The C320 will have a 5-speed automatic transmission, while the C240 will be available with a 6-speed manual or 5-speed automatic transmission.

Mercedes, which built 1.6 million copies of the previous generation C-Class, says competitors for the new model include the 3-series, Audi A4, Lexus ES300 and Volvo S70.