The most common and most likely answer to this crossword clue is the 8 letter word MOTORCAR
I've seen this crossword clue in The Guardian
M
O
T
O
R
C
A
R
More clues leading to the result MOTORCAR
Buddy explains!

The straight part
We know that "Mercedes" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case mercedes = motorcar.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does MOTORCAR mean?
MOTORCAR noun- An enclosed passenger vehicle powered by an engine.