Mercedes' AMG lineup might be massively throttled back
Mercedes-AMG represents a long term partnership between two great companies. AMG originated as small tuning company for Mercedes-Benz in the early 1960s. At the time many of Mercedes's cars were underpowered and slow, as a result AMG stood out as an option for those of us who wanted a slightly faster Benz.
Nowadays AMG is less so a tuning company and more so an integral part of Mercedes performance. Developing engines and powertrains for just about every Mercedes under the sun AMG offers a special version of just about every vehicle, ranging from the G-Wagon to the AMG GTR Pro.
Worryingly, however, in the coming years, severe penalties in Europe for automakers who don’t meet European Union emissions standards will rise into the tens of billions of dollars. As a result, many automakers have been scrambling to electrify their lineups. Interestingly, Europe's SUV market has grown to over 35 per cent, and as a result has raised C02 emissions to levels which are higher than they were back in 2017.
Enacted right after the 2008 financial crisis these new emission laws will go in full swing by 2021, giving automakers over 10 years to get their acts together. Daimler recently revealed a pretty wide margin between its current emissions of 138g/km and its target of roughly 100g/km. The issue being that many European buyers simply aren't interested in electric cars, and for a company like Mercedes-Benz this is a problem.
As a result of all this it seems like Mercedes might have to give its gas-guzzling AMG division a little bit less gas. AMG is by far the most C02-intensive division at Mercedes-Benz and a last minute solution could be to cut back on AMG.
Worryingly, however, AMG is believed by analysts to be a significant contributor to the bottom line.
On top of that AMG provides a considerable amount of brand awareness, something which will lead customers to Mercedes, and perhaps cause them to buy a car.
However, these developments are not exclusive to Europe – the U.S. had similar regulations installed during the Obama administration. Similarly, many manufacturers now have to meet stringent emissions standards, especially in states like New York and California.
What this means is that gas-guzzling vehicles like Mercedes's AMG line may slowly wilt away as automakers attempt to meet their required emissions quotas. Furthermore, this will send a ripple effect throughout the global car market, as it would be financially inviable for Mercedes-AMG to develop vehicles that cannot be sold in both Europe and the United States.
This represents a fundamental change in the automotive industry, as many automakers may be forced to turn towards electric sports cars in an attempt to maintain their high-performance divisions. Not only do divisions like Mercedes-AMG and BMW M create brand awareness, but as we mentioned before they do represent a major part of these automakers' bottom line.
Sadly, the result of all this may end up with the death of gas-guzzling performance cars, something which many people will mourn the loss of. Having said that, it is still uncertain what will happen at this point, however, it's a pretty safe bet that Mercedes-AMG might be in for a rough couple of years.