NAPA, Calif. - Mercedes-Benz of North America Inc. hopes a trickle of highway-inhaling hot rods from Germany will generate a river of demand for all of its vehicles.
Just 500 copies of the E55, a 349-hp version of the E-class sedan modified by the German firm AMG GmbH, will be sold in the United States in each of the next four years. That is barely 0.3 percent of Mercedes U.S. sales to date in 1998.
But the company believes buyers of the E55 and future models planned for similar AMG treatment will become unpaid spokespersons for the Mercedes brand, increasing sales of its other vehicles. It is a strategy underlying DaimlerChrysler AG's long-term plans to build a mini-brand of exclusive performance cars around AMG, the 31-year-old aftermarket tuner of Mercedes-Benz cars.
'We really believe in creating advocates for the Mercedes-Benz brand,' said Mike Jackson, president of Mercedes-Benz of North America. 'That's the future of marketing, and it takes products like the E55 to do it.'
MOST EXPENSIVE E
When it arrives in showrooms this December, the E55 will be the most expensive version of Mercedes' volume-leading E class at $69,695 (including $595 destination charge). That will give the E class a substantial price walk up from the base six-cylinder turbodiesel, which retails for $42,935.
The E55 joins the V-8 powered C43 in Mercedes' current AMG-badged lineup. The automaker plans to launch an AMG version of every model it sells here, says Joe Eberhardt, Mercedes-Benz of North America's marketing vice president.
That will happen while DaimlerChrysler completes the buyout of AMG begun this year. AMG, whose name stands for founder Hans-Werner Aufrecht, his former partner Erhard Melcher, and Aufrecht's hometown of Grossapach, Germany, sold 51 percent of itself to Daimler-Benz this year. The company had sales of $250 million in 1997.
Except for its racing division, AMG and its 500 employees will be completely in DaimlerChrysler's hands by 2009, Eberhardt says. The new subsidiary will be called Mercedes-AMG GmbH.
The buyout gives Mercedes a competitor to BMW's high-performance M cars, but Daimler-Chrysler wants to keep volumes lower. In the first 10 months of this year, BMW sold 10,916 M-badged vehicles in the United States, dwarfing the 1,000 E55s and C43s Mercedes plans to move in 1999.
'The goal is not to market AMG to a broad audience,' says Eberhardt, 'but to use the demonstrated performance of these vehicles to create a halo effect for our entire product line. It would probably be very easy to sell three or four times the volume, especially in the first year, but that would be counter to our strategy.'
Creating an E55 is a complicated affair spread over various neighborhoods around Mercedes' hometown of Stuttgart.
First, Mercedes builds up an E-class body shell at its plant in Sindelfingen, with a special interior featuring black-stained maple trim and optional two-tone leather. Every option available on the cheaper-by-$13,800 E430 Sport is included except a $1,495 cell phone and CD changer package.
The painted shell then travels one hour north to AMG, where technicians install a 5.5-liter V-8 with a special exhaust. The engine is a stroked version of Mercedes' new 5.0-liter single-overhead-cam V-8, which has two spark plugs and three valves per cylinder.
AMG installs a remapped electronic engine controller, modular camshafts giving longer valve openings, and a new crankshaft. The change give the E55 a higher and flatter torque output, with a peak of 391 pounds-feet at 3,000 rpm.
Mercedes claims zero-to-60 in 5.4 seconds and an electronically limited top speed of 155 mph.
AMG also installs the five-speed automatic transmission from Mercedes' V-12 models and 18-inch wheels bolted to a beefier suspension. The chassis rides on springs that are 35 percent stiffer than those of the E430, Bilstein 'digressive' shock absorbers (softer over low-speed bumps, firmer at higher speed) and thicker stabilizer bars. The car receives a quality check and road test at AMG, then returns to Sindelfingen for final checkout and shipment.