The £4m showroom will be managed by used car sales manager Peter Vardy, the younger son of group chief executive Sir Peter Vardy and grandson of Reg Vardy who founded the company.
The company believes the site is the only dedicated franchised showroom exclusively for used cars in Scotland. The investment follows its selection by Daimler-Chrysler as the authorised Mercedes-Benz retailer for the strategic market area.
With space for 21 cars in the Milton Street facility, drivers can also view the group's 150-strong list of pre-owned Mercedes models via an online stock locator. Vardy has recruited two new sales executives to strengthen the six-strong sales team.
Reg Vardy has also opened a new Mercedes-Benz dealership opened in Ayr during the summer, followed by a new dealership for Smart in Glasgow.