Mercedes C63 Key to AMG Lineup in U.S.

SCOTTSDALE, AZ – The Mercedes C63, the brand’s lowest-priced AMG model is one of the most important vehicles in the AMG lineup.

So says Bernhard Glaser, Mercedes-Benz general manager-product development, at a press preview for the car here. “About 50% of AMG performance-model production goes to the U.S.,” he says.

The fifth-generation C-Class AMG is designed from the ground up, with an all-new 451-hp engine that has the highest output in its segment.

“It’s a C-Class like we’ve never had before,” Glaser says. “We’ve changed everything in front of the A-pillar.”

The C63 is built at AMG’s plant in Altalferbach, Germany. About 3.6% of Mercedes’ 253,000 sales in 2007 were AMG models, or some 9,000 units.

The performance car goes on sale in the U.S. April 15 for $54,625, including delivery.

“That’s been stable for the last thee years,” says Robert F. Allan, manager of AMG products for Mercedes-Benz USA. “I don’t expect any appreciable (volume) change with the C63.”

Mercedes expects C63 AMG conquest sales.

Allan estimates a typical C63 will sell for $62,500. That includes xenon headlights, leather seats, a multi-media center and gas-guzzler tax that is expected to be at least $1,300 in the U.S.

Mercedes has sold 35,000 C-Class cars in the U.S. since the latest iteration was launched last August, enjoying conquest sales from owners of Asian and European near-luxury models, Allan says. Owners of domestic luxury cars are conquest buyers to a lesser extent.

He says the C63 could have a conquest rate as high as 60% from major competitors, such as the BMW M3, Audi S4, Lexus IS-F and Cadillac CTS-V.

The niche, at about 14,000-15,000 units annually, is a small one, Allan admits. But all auto makers are interested in these customers. “That’s what makes it so exclusive,” he says.

Allan expects the C-Class will have fewer AMG buyers than higher-priced Mercedes models, because many AMG owners have other cars for commuting to work. But he insists the C63 is very much an everyday car.

Mercedes is in the process of opening seven pilot AMG performance centers in U.S. to elevate the ownership experience.

“We want to differentiate AMGs from (other) Mercedes-Benz products,” says Greg Clark, the executive in charge of the program. He predicts all seven centers will be in operation by June.

At present, AMG models are dispersed on dealership floors throughout showrooms. However, no Mercedes dealers will be excluded from selling AMGs if they do not establish a separate performance center, Clark emphasizes.

The first seven dealers to set up separate AMG centers are among the top- 20 AMG volume dealers. Fletcher Jones of Newport Beach, CA, and Mercedes-Benz of Coral Gables, FL – the top-2 AMG dealers nationally – are among the seven selected in this marketing project.

Clark says the seven dealers will have a select group of employees, who will get special coaching in selling AMG models. One employee from each of the seven dealers has traveled to AMG headquarters in Germany to observe how the performance cars are built.

The goal of setting up the select group of dealers is to elevate the level of service and customer experience. “Our overall goal is to raise the exclusivity of the AMG brand,” Clark says.

Dealers who invest in the AMG performance showcase will be rewarded with an allocation of six extra cars. The product mix has not been made final yet, but Clark says it probably will include an extra C63.

Mercedes believes the additional AMG units will help participating dealers make more conquest sales.