In a world where luxury goods are increasingly important, no brands are more highly regarded than Ferrari and Mercedes-Benz.  But they couldn’t be more different.  Mercedes-Benz builds around a million cars a year—Ferrari, about 5000.

Both brands have a rich history of building road and race cars—many older examples of each are treasured by collectors, and command high prices when offered for sale.  And each has had to cope with problems to remain desirable in today’s world.

In the early 90’s, Ferrari cars were bought by collectors and immediately put “under glass”, not to be driven.  The management of Ferrari realized that their heritage was that of building race cars and fast road cars—cars that were used and enjoyed.

So with each new model they encouraged activities in which owners drove and appreciated their new cars.  They invented the Ferrari Challenge, in which an owner contracts with a Ferrari dealer to maintain his car and deliver it, race ready, to whatever racing circuit is hosting the next event.  There, Ferrari owners race against one another for an annual championship.

Another challenge Ferrari met, and headed off, came from Acura, the Honda upscale brand.  Ferraris had always been fast and stylish, but also high-strung, temperamental and demanding to drive.  Along came Acura in the early 90’s with a two seater “super car” called the NSX.  It challenged Ferrari by being fast and sophisticated, and expensive.  Acura raised the ante by being easy-to-drive and trouble free.  Enthusiasts were lukewarm about the NSX, admitting it was just about perfect, but complaining it didn’t have the allure, character, or “sexiness” of a Ferrari.  So, although there was no commercial damage, Ferrari got the message.

The F-430 I drove the other day was dazzling, both visually and in its driving performance.  It’s not fussy—you could contemplate driving it as your everyday car.  But you probably wouldn’t because, especially in the city, where do you park?  No good giving it to the valet, and there’s no space in the garage sufficiently protected from door dings.  All Ferraris are made in Marinello, near Modena, in Reggio Emilia, the gastronomic heart of Italy.  At the factory entrance there’s a fine restaurant, Il Cavallino.  I lunched there the other day.

Arriving at lunch time, you’ll notice all the workers breaking for lunch.  Everyone wears handsome red coveralls, with a Ferrari logo, looking almost as stylish as a Formula One pit crew.  There’s obviously a great esprit d’corps.  Can you imagine how proud a young Italian would be to get hired at Ferrari?  Do you think there’d be more devotion to his job than displayed by a unionized auto worker in Detroit?

Not incidentally, the lunch at Il Cavallino is just right—simple and superb in the Italian way.  If you avoid buying the $33 Ferrari-logo baseball cap, the price is right, too.

The Mercedes-Benz story starts with arrival in central Stuttgart, where the main railway station is topped by a huge Mercedes star—denoting a company town if there ever was one.  Many Stuttgart suburbs have Mercedes-Benz factories, too.

The most impressive building in a city with plenty of modern architecture is the new Mercedes-Benz museum, a dramatic sort of super-Guggenheim building, designed by Dutch architects.  A series of exhibit halls display different categories of Mercedes-Benz vehicles from over the years.

Racing and sports cars, sedans and wagons, everyday cars, emergency vehicles like ambulances and fire trucks emphasize the wide array of Mercedes-Benz products.  With all the hype surrounding hybrids, it’s refreshing to be reminded that Mercedes was responsible for the first Diesel-powered passenger car, in 1936!

Like Ferrari, Mercedes-Benz has recently been influenced by the Japanese motor industry.  As cars contain more and more electronics, it’s important that this new-wave technology be as reliable as the more traditional components.  Although Mercedes can legitimately claim their cars are always strong, durable, and have excellent road manners, their adoption of electronics has lead to some glitches, which have lead to some bad press and poor reliability ratings.  The Japanese brands have largely avoided these problems, earning high marks for reliability in the process.

Mercedes-Benz has been on a crash program to make their cars more reliable.  Judging from a recent drive in their newest, an S550 sedan ($100,000) they must be confident in their solution.  This car is laden with electronic accessories and assists, enough to require an owner’s manual of 700 pages!

By not reading any of it, I protected my electronic illiteracy, and I could still figure out how to operate this superb car.  The Mercedes-Benz S550 may well be the best car in the world.  It’s big, spacious, heavy, and complex.  But it drives beautifully, and the Ferrari F430 wouldn’t leave it far behind on the open road.

Not so many years ago, the luxury car business offered a sort of haven from the competitive rough-and-tumble that characterizes the auto trade.  But Mercedes must face BMW, Audi, Porsche, Range Rover, Jaguar, Acura, Infiniti and Lexus—all capable and anxious for greater market share.

Ferrari faces Lamborghini, Maserati, Aston Martin, plus some likely Japanese contenders.  The only result that can be predicted with certainty is that your choice as a consumer will be huge, and the cars will be fabulous.