Maybe they mean the "transfer case"? Are there symptoms, or did the shop
just "discover" the problem?
The W163 does have a two-speed transfer case, and they have been known to
leak. If that's the case, then just needs a seal replacement which is
usually not a big deal.
Another common problem is that the shifting servo tends to fail if it isn't
used regularly (i.e. monthly). The "Low Range" switch on the dash (left of
the radio) will shift between low and high range gearing. Press this with
the engine is running, the transmission in neutral and at a complete stop.
If you get a few blinks and then steady illumination of the "Low Range"
indicator on the instrument cluster, then all is well (and you will know it
because it will be like driving around in second gear). To shift back to
normal driving, repeat the procedure and the light will turn off. If the
indicator only blinks and does not stay illuminated, then it means it cannot
shift into low range. This could be caused either by not following the
instructions (i.e. not in neutral, or not at 0mph) or because something
(such as a failed server or frozen mechanism) is preventing it. A failed
servo is not difficult nor expensive to replace. If its anything mechanical
and internal to the transfer case, that gets expensive because MBZ does not
service the components - they replace the entire unit.
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