I think it pretty much stands for what it always stood for, precision engineering, highest quality, and prestige - those values have not changed but market forces have played a big part in how Mercedes has been re-structuring itself over the past decade - this has been quite disruptive to the whole company and some in the industry have taken great delight in seeing the brand struggling a bit in recent times - long term, I think Mercedes will have to get used to sharing the spotlight with BMW and Audi - I think they are all pretty much on a par with each other as far as quality goes these days.

I don't think it is solely product diversification, the fact is both BMW and Audi are producing extremely competitive cars that take on Mercedes and beat it in some areas - as far as brand image goes, Mercedes is still the brand that people associate with German quality - it is still the biggest bourgeois status symbol.
PORSCHE
I have always had a special fondness for Porsche. It is an outstanding brand - IMO they still build the best cars in Germany. In spite of Porsche's foray into the SUV market, they have remained true to their traditional values. Porsche is a less emotional brand than Ferrari - their brand image is more academic, more intellectual and pragmatic - just like their cars - this is why Porsche is so strong - it is a brand that knows precisely what it represents.

FERRARI
Whereas Porsche is about technology and cold, hard engineering from a level-headed perspective, Ferrari is about passion and the artistry of high speed, the aestheticism of engineering - it is very Italian in that way. Ferraris are of course high-tech, but that is not their raison d'être (unlike Porsche), a Ferrari is an object of passion first and foremost. Their brand image is so strong - I can't imagine them ever building an SUV or limousine - that would just be wrong.

LAMBORGHINI
Only the Italians could create such a car as a Lamborghini (the old ones at least) - the outrageousness of them is something that only an Italian could see any logic in. Visibility and practicality are of absolutely no concern to a Lamborghini fanatic. The new Lamborghinis are technically better than ever, but I can't help feeling that some of the old magic has been lost under Audi. Somehow, even a gentle influence of German logic seems to have softened the whole image of Lamborghini - don't get me wrong, the Murcielago is a wonderful car, but it just doesn't have that Italian spark of "genius bordering on insanity" that the old cars had - that is now the preserve of Pagani.

ROLLS-ROYCE
The venerable old lady, few other brands are as powerfully evocative as Rolls-Royce. When I think of what Rolls-Royce means, the picture I have in mind is of a 1920's aristocratic Englishwomen being driven in her Phantom II to a London atelier to have a fitting for a party dress in time for "the season". But in these politically correct and less sophisticated times, the traditional Rolls-Royce image is an anachronism, with all it's connotations of breeding and class distinction. Today's Rolls-Royce buyer, is far more likely to have aspired to owning one rather than inheriting the means to do so. In the past, owning a Rolls-Royce was something one was born to - they were a symbol of high-birth. Today, Rolls-Royce is a symbol of success - an aspirational object rather than an symbol of class elitism.

BUGATTI
As much as I admire the Veyron, to me you simply cannot resurrect history (as DCX are finding out with Maybach). The rarefied world Ettore Bugatti lived in was far more elegant and dignified than anything that exists today - a world of connoisseurs, craftsmanship, and art. The Bugattis built in Molsheim in the 1920's and 30's were the products of passion, exquisite taste and most of all, love. Ettore Bugatti was a man of his time and his vehicles were the ultimate automotive expression of high-culture in their time. Sadly today, this context simply cannot be recreated - far too much has changed. The new Bugattis may be great cars - but the originals are something extraordinarily rare, they are objects of true greatness - the pure expression of engineering as art.