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Date registered: Jan 2006
Vehicle: About a dozen 1988, 1989, 1990, and 1991 sedans, wagons, and 4Matics; drivers, projects, and parts
Location: Just west of Philly
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As neanderthal said, the 230E was never sold here in the USA. In fact there were NO 4-cylinder 124s sold here ever. Mercedes cultivates a strong luxury image here and most models sold here have standard equipment that is sold as optional in other markets. Auto transmission, air conditioning, electric window lifts, central locking, electric sunroof, alloy wheels, vinyl or leather upholstery, cruise control, electric seat adjusters, etc. are found on just about every model here from at least the mid-1980s.
If your primary concern is city fuel economy I don't see how you can go wrong with a 230E. The auto transmission will hurt you though.
I own an 88 260E and 88 300Es and there's a surprisingly large difference in performance between the two despite a hp difference of less than 20 hp. When my 260 hit about 160k miles and got pretty tired (especially with the a/c on) I pulled the whole 2.6 drivetrain and installed one from a wrecked 300E. MUCH better performance.
But you're in a different market and competing traffic will be different. I need to compete with 5.0 L and larger trucks and SUVs that can really roll.
As for fuel injection, all the 124 models sold here had it. I know that BMW was exclusively fuel injection here by 1987 so Benz was probably the same.
The system on 124s is kind of primitive (but durable and easy to work on). It's a Bosch CIS with a fuel distributor and low pressure pipes to mechanical spray nozzles, not pulsewidth modulated electrically actuated injectors.