Mercedes will task dealers to step it up for AMG

KNOXVILLE, Tenn. -- Mercedes-Benz USA aims to quickly expand its offerings of AMG Sport models and will ask select dealers to invest in dedicated showroom space and additional training.

By the end of 2016, the brand plans to have 100 AMG performance centers at dealerships around the country. The first 10 will be piloted by Christmas of this year, Steve Cannon, CEO of Mercedes-Benz USA, said on the sidelines of a media event here. Nearly one-third of the brand's 370 dealerships ultimately would have a center.

"You need to treat AMG as if it were a Porsche franchise that sits inside your Mercedes-Benz store," Cannon said he's telling dealers. "We need to really step up our game in how we treat the AMG customer and how we treat the AMG brand."

With this year's introduction of the AMG Sport line, Mercedes takes a big step toward expanding AMG sales. The line is designed to bridge the gap between standard Mercedes-Benz models and full-fledged AMG versions with hand-built engines. Think of it as AMG lite; executives note the vehicles will fulfill the AMG brand promise with special styling cues, more powerful engines and sporty suspensions. 

The first of the line -- the C450 AMG 4MATIC and the GLE 450 AMG 4MATIC Coupe -- went on sale in late summer and have sold 1,200 units combined so far, Mercedes says. AMG sales are up 28 percent this year, Cannon said. In 2014, the brand sold 11,303 AMG vehicles. With the new line, Cannon expects a sharp increase in AMG sales, though he declined to share targets. 

Several more vehicle lines will get AMG Sport variants in 2016, and over time, AMG Sport versions are likely in every vehicle line that already has a full AMG model, Cannon said. 

Mercedes will dedicate "pretty significant" advertising dollars to market AMG, Cannon said. The campaign will include TV, print and digital. 

Dealers who sign on for the performance centers must pay for extra training for employees and dedicate part of their showrooms -- at least 2,000 square feet -- to a special demonstration area for AMG. The centerpiece will be an 8-foot-square AMG Powerwall display screen. There will be two levels of centers: basic and professional. The professional level, likely for 50 to 60 of the centers, requires more square footage. 

The ballpark investment for dealers will be $200,000, Cannon said, but that will be more than covered by an additional per-vehicle bonus payment to the dealerships. Because he is still finalizing the details with the dealer council, Cannon declined to share the bonus structure. 

Mercedes will invite dealerships to install centers based on historical AMG sales. The biggest volume potential is on the coasts, especially California and New York, Cannon said, plus south Florida and Chicago and other major cities.