In these times when limited-edition classic cars are fetching top dollar, some really rare machines are appearing from relative obscurity. This Mercedes-Benz 500TE AMG has to be almost as rare as rocking-horse poo.

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Before AMG was incorporated into the auto giant that is Mercedes-Benz, it was an independent tuning house that pretty much did as it pleased. The speed merchants from Affalterbach were stuffing large Mercedes engines into cars that they were not meant for. Most notable of these was The Hammer that earned AMG fame across the world.

AMG also created an extremely rare (only two are thought to have been built), and little-known, beast in the shape of this V8-powered Mercedes-Benz 500TE AMG. The S123 – stationwagon version of the W123 – had a 5,0-litre V8 stuffed into the bay that usually housed an inline-four- or a six-pot. The conversion – rumour has it only two sedans, one coupe, and two wagons were built – was supposedly horrendously expensive at the time.

Codenamed M117, the all-aluminium engine was a naturally aspirated motor that was borrowed from the 500 SLC of the era. It was treated to several bespoke touches to fit into the smaller engine bay. The upgrades included custom branches, downpipes and additional oil coolers. Rumour has it that motor was good for 205 kW when new. To handle the additional power, twice what any S123 had at the time, the 500TE also sported anti-squat rear suspension, a limited-slip differential and cast-aluminium trailing arms borrowed from a W126.

Bespoke appearance and interior

To help the Mercedes-Benz 500TE AMG stand out from lesser-powered wagons it was fitted with a bodykit that included a lower front apron and side sills, not forgetting five-spoke alloys painted in the same colour as the body. The standard car’s front chairs were replaced by electrically adjustable Recaro sports seats and a new four-spoke steering wheel, bearing an AMG badge, was fitted. The whole cabin was covered in period-popular tan hide.