Mercedes AMG Shedding U.S. Gas-Guzzler Tax Burden
Contrary to common belief, affluent consumers do care about the tax, which ranges from $1,000-$7,700, says Thomas Rappel, AMG’s chief of product management and planning.
SANTA BARBARA, CA – Mercedes-Benz is closing in on eliminating the gas-guzzler tax on its line of performance-oriented AMG vehicles sold in the U.S., some of which produce more than 500 hp and cost north of $100,000.
Contrary to common belief, affluent consumers do care about the tax, which ranges from $1,000-$7,700, says Thomas Rappel, AMG’s chief of product management and planning. Mercedes sells 20,000 AMG units worldwide each year, but does not break out U.S. deliveries.
“I think it’s all about social acceptance; that’s the important word,” Rappel tells WardsAuto at a media event here. AMG customers “want to make sure the car they drive to their clients, or outside their companies, is a socially accepted car.”
The gas-guzzler tax is levied on all passenger cars sold in the U.S. that achieve less than 22.5 mpg (10.4 L/100 km) in combined city/highway driving; the lower the fuel economy, the higher the tax. The levy does not apply to minivans, SUVs or pickup trucks.
AMG buyers also have to worry about violent acts inflicted upon their vehicles. Rappel says there have been numerous cases in which the cars have been vandalized because they were perceived as being owned by wealthy people who care little for the environment.
And just because a client is wealthy doesn’t mean he wants to pay a tax that offers no real-world value. AMG customers “know how to spend (money) and not waste it,” he says.
Mercedes engineers strive to make each generation of AMG vehicles more fuel-efficient than before, Rappel says. Today, the C63, SLS, S65 and CL65 are the only gas-guzzler offenders out of the 15-vehicle range.
“It is the last dinosaur in the AMG lineup,” he says of the cars, noting by 2015 no AMG vehicle will be burdened by the onerous tax except for some V-12 models.
Mercedes engineers have adopted a number of approaches to improving fuel efficiency without sacrificing power and performance. Light-weighting is the key, Rappel says.
Increasingly, Mercedes is replacing steel parts with materials such as carbon fiber and aluminum. Components targeted for light-weighting are “not just trim parts, which are for appearance, but functional pieces,” he notes. “And light weight means better handling.”
The performance group also is downsizing engines, a common trend among mainstream brands. The new ’12 ML63 SUV, for example, is powered by a 5.5L twin-turbo V-8 in place of the 6.3L V-8 that powered the outgoing model.
Mercedes reduced the displacement of the ML63’s engine despite the fact that, as a light truck, it avoids the gas-guzzler levy.
With or without the performance package, which adds 32 more hp to the base ML63’s 518 hp, the new SUV uses 28% less fuel than its predecessor. The ML63 also features stop/start technology, which is migrating throughout the AMG lineup.
“Our goal was to reduce consumption 30% (across the AMG range) by 2015,” Rappel says. “This was the path we gave ourselves, and what we have done so far is follow the path.”
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