One thing to keep in mind that early radial tires had major NVH issues and had a reputation for lots of road noise and stiff, uncomfortable ride quality compared to cross-ply tires. All American cars and most European cars of the 1960s and earlier were also engineered specifically for cross-ply tires, and the differences in design and tuning of the steering, suspension, etc. exacerbated these disadvantages. It would make sense for Mercedes to be late to the party; handling performance for luxury cars was not nearly as important then as it is now.
Also Automation uses a highly abstracted way of calculating the cost of things that disregards marketing, economies of scale, superstitions and biases among engineers, executives, investors, and customers, and the fact that tires, too, are an industry–tires don’t grow on trees, companies have to make them. Radial tires mean entirely new tooling, retraining workers, etc. Assigning P245/45R17 tires to your 1967 sports car in Automation is easy. If you were a real auto exec in 1967 and called up Michelin for an order of 500,000 P245/45R17 radial tires, the rep would probably tell you to sober up and place a serious order in the morning because you must be very drunk. The American companies were worse–they could not produce any radial tires at all. Goodyear spent several years, tens of millions of dollars, terrified their investors, and wagered the future of the company on radial tires taking off in the late '60s and early '70s, building whole new factories and devising new production processes. If they had been wrong the costs would have ruined them.