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Mercedes-Benz seeks to build awareness of its expanding AMG® performance line

A conversation with Branden Coté, AMG® Brand Manager

by Larry Printz

Branden Coté, AMG Brand Manager, for Mercedes-Benz, USA

Branden Coté, AMG® Brand Manager, for Mercedes-Benz, USA.

"It's the renegade brand of the industry, where we create these absolutely incredible automobiles with some of the best driving performance in the world."
 

The letters AMG® have always stood for one thing at Mercedes-Benz: performance.

Founded by two automotive engineers who wanted to build racing engines for Mercedes-Benz vehicles, the brand grew as an outside tuner of Mercedes-Benz products. The firm's name derives from the two engineers' names, Hans Aufrecht (A) and Erhard Melcher (M), and Aufrecht's birthplace, Großaspach (G).


See How AMG® Started

By 2005, the company had become a wholly owned subsidiary of Daimler Benz.

Since then, Mercedes-Benz has moved to expand AMG® into a Mercedes-Benz sub-brand by introducing new AMG® products. Nevertheless, the company that became known for its one man, one engine philosophy-where a single person was responsible for a powerplant's construction-is being watered down as some newer, less expensive AMG® products no longer boast AMG® engines, although the vehicles are otherwise tweaked for superior performance.

To get a better idea of what's in store for AMG®, I spoke with Branden Coté, AMG® Brand Manager, for Mercedes-Benz, USA at the 2016 North American International Auto Show in Detroit.

Larry Printz: "AMG® has long been identified with high-speed performance cars at Mercedes-Benz. But that's changing somewhat. Can you speak to that?"

Branden Coté: "So, for the past few years you've seen tremendous growth in the AMG® brand, not only from a sales standpoint, but from an awareness standpoint. But we still see a tremendous opportunity for growth. AMG® has always lived as the top-of-the-line in the Mercedes line-up. It's been the most expensive Mercedes you could buy, or the highest horsepower Mercedes you could buy, and now what we're really trying to do is to get the word out there that we're the high-performance division of Mercedes-Benz. So it doesn't necessarily mean that we're the most expensive or the highest horsepower, but we're really a true engineering and design firm of the Mercedes brand.

"As we're making investments in the top end of our portfolio like the GT S which you just drove, and the S 65 Cabriolet that we just launched today, we're also making investments in the other end of the spectrum as well to broaden our customer base, and bring customers in earlier in their lifetime and their buying cycle. And hopefully, with our high loyalty rate, keep them and walk them up through the models."

Pictured Above: The 2016 AMG® GT S, and Below: The AMG® Schumacher European Ltd Phoenix Showroom. 
  
Larry: "I suppose that would give the cars a different personality since you're not just concentrating on ultimate horsepower."

Branden: "Look at any AMG® model, whether it's the traditional 63 or 65 that you see on the road, or the new line of 43s that you see, there are more than 500 unique AMG® components in every vehicle. So it's not just that we go in and change the engine or tweak the motor or a different transmission; we really go in and re-engineer the vehicle to be a true performance vehicle, which gives it a completely different dynamic, style and driving characteristic.

Larry: "That sounds expensive."

Branden: "It is expensive, but we gained a lot of efficiencies when we became a wholly owned subsidiary of Mercedes-Benz. I mean historically, as AMG®, we would literally have to buy Mercedes-Benz products, re-tune, re-engineer the entire vehicle and then go sell it. But now that we're a wholly owned subsidiary, we're in the design and engineering phases of every car from day one, from concepts through market introduction. So we get a lot of economies there.

 Pictured: 2016 AMG® S65 Interior

Larry: "How has that changed Mercedes-Benz's buyer profile? Has AMG® changed it dramatically?"

Branden: "Historically AMG® clientele has always been a little bit different than the Mercedes-Benz clientele has been. They tend to be a little bit more male demographic, a little bit younger demographic, and a little bit higher household income. So that's always been the case and will continue to be the case. But as you move forward with this new line-up of vehicles, we're going to see that grow even more. You'll see it bring more females to the brand. I think it will allow us to attack even younger demographic with our vehicles and reach markets that we haven't been able to achieve before."

Larry: "So, AMG® may be as much about better handling and performance, rather than just high horsepower."

Branden: "Exactly. The difference between the top-of-the-line Mercedes-Benz and the next AMG® model is differentiated by a $20,000 price jump, which is a significant price jump. With these new 43s that we are now launching, we're going to split the difference. So you're getting all of this great engineering and performance from AMG®. We're touching all of the parts of the car that we touched with the 63s, just to a little bit less of a degree, and now we can offer it at a really attractive price point."


Larry: "Has the take rate of AMG® models gone up as an overall percentage of sales?"

Branden: "Especially with this new line of vehicles, we see a huge increase in AMG® sales, and AMG® sales are growing at a faster rate than the rest of the Mercedes-Benz line-up, at least in the U.S. market."

Larry: "So AMG® acceptance is very country specific?"

Branden: "This year is the first year where the U.S. is not the number one market in the world for Mercedes-Benz sales; China just surpassed us. But from an AMG® standpoint, we are still the largest market in the world, and we sell two-and-a-half-times more AMG® than the number two market. So we have a huge advantage there."

Larry: "What is the number two market?"

Branden: "Germany. So we still have a huge lead when it comes to AMG® sales. But that's true of this country in general. We're very performance oriented when it comes to automobiles."


Larry: "Because America is the largest market for AMG® models, does that affect the performance envelope? Are they tuned for America or is it a single solution for all markets?"

Branden: "AMG® is the same in every single nation. So if you buy an S63 in the U.S., it's the exact same S63 that you can buy in the rest of the world. There are some regulation changes - marker lamps and things like that - but the vehicle itself is identical. But being the largest market in the world, it definitely gives us a voice at the table when they talk about development of new product; what features do we need to be looking at, how are we going to be equipping the vehicles to make sure that we stay competitive, especially being the largest market.

Larry: "You stated that AMG® tends to mainly attract male buyers. How do you get more women interested in AMG®? What are they asking for versus what men are asking for?"

Branden: "I think there's a couple things. First, I think that in the market in general, we are seeing that the female population is becoming much more interested in performance. So we're going to see an uptick in female performance drivers, which is awesome, right? But the other thing is that all of our advertising and marketing activations need to make sure that we are taking that into consideration moving forward and focusing not only on pure performance, but how do we balance the driving performance that AMG® brings to the table with the luxury and craftsmanship that Mercedes brings to the table to create one of the most perfect automobiles for both male and female, for both young and old. Every vehicle is a compromise. Our job is to minimize those compromises as much as possible to appeal to a wide performance audience."

Larry: "What is the biggest challenge for AMG®?"

 
Branden: "I think in the U.S. market in particular, a lot of it has to do with awareness. If you're in the industry, like yourself, you don't have to ask what AMG® is; everyone knows how we are known for our one man, one engine philosophy; our technical and engineering expertise; everyone understands and respects us for that.

The challenge is when you go across the country and ask people, 'what is AMG®?' we don't have that level of awareness outside of the auto industry, like the Porsche brand for instance. I can ask any man, woman or child in the United States, 'what is Porsche?' and everyone will tell me, 'that's a sports car manufacturer.'

At AMG®, we are still growing our awareness here in the U.S. for people who do not read car magazines on a regular basis and don't go to auto shows on a regular basis. And that's really important for growing the brand, especially with those demographics we are not yet targeting."

Larry: "Among enthusiasts, you say AMG® and the first thing they consider is the added cost. So isn't that a challenge going forward as well? That it's too expensive?"

Branden: "I don't think so. We offer a premium product in the marketplace. As long as a premium product can live up to its claims and the level of performance that we're putting out there, it will command the proper price for it. We see over and over that customers are willing to pay for it."

Larry: "Obviously you're a premium product and command a premium price. You're known for that."

Branden: "Look, we're not for everyone and that's OK. That's why Mercedes offers such a wide variety of products at many different price points, many different levels of performance, emotion and utility. We're just one piece of that puzzle."


Larry: "So what do you say to an American who doesn't know what the letters AMG® stand for?"

Branden: "To be honest, I get a little bit traditional and go back and tell the story about how we, AMG®, started. Where we had two Mercedes-Benz engineers and they wanted to do something different from Mercedes-Benz, they wanted to do something high performance. And they were renegades who left Mercedes to go start AMG®. And that's kind of what AMG® is; it's the renegade brand of the industry, where we create these absolutely incredible automobiles with some of the best driving performance in the world.

"That's proven over and over again. Look at our F1 races: Constructor and Driver Championship 2014, Constructor and Driver Championship 2015, and I am very confident that we will have the trifecta next year."

 
Larry: "Given ever-toughening government fuel economy standards and emission mandates, how tough is it to meet them, yet still offer that performance?"

Branden: "For us, performance isn't just high horsepower and 0-60, good performance is fuel economy as well. When you look at the new 4.0-liter engine that's in the GT S, it's the most fuel-efficient V8 production motor in the world. So fuel economy is very important to us, and we incorporate a lot of technologies into our performance engines such as automatic stop-start technology, nano-slide technology so that we get less friction and better fuel economy, and features such as when you're coasting in the GT S it disengages the drivetrain from the motor so that there is less drag on the vehicle. So fuel economy is important to us as it is to everybody. That's part of the performance equation.

Larry: "Now you mentioned nano-slide technology. Can you explain what that is?"

Branden: "What we do is that on the inside of our cylinders, we do a nano-slide coating on it, it's a coating that we actually patented, and what it does is that it creates a mirror-like finish on the inside of the cylinders. What that does is that produces less friction between the piston and the cylinder, which allows us to get more efficiency out of the motor."

Larry: "Thank you. I was wondering what that was. So the biggest challenge ahead is awareness. Is that it?"

Branden: "I see that as one of the challenges as we go through this next couple of years as we need to grow the brand. And a lot of the new products are going to help with that. The GT S has led to a huge increase in awareness and we have a huge product line-up that we are coming out with the rest of this year as well. We have double digit launches this year for the AMG® brand. So you're going to see a lot of new product this year to help increase the awareness."

Larry: "Of course, helping you out is Mercedes-Benz's current styling. It's so much more dynamic than it was 10 years ago."

Branden: "I think it's second to none. I think the S Coupe, which is almost two years old at this point, is the most beautiful car on the road. And the new E-Class just follows that tradition."

Larry: "Thank you shedding some light on this exclusive part of the Mercedes-Benz line-up."

Branden: "You're welcome. Thank you."


Larry Printz is Editor-In-Chief, Automotive at Dealer.com. He can be reached at larry.printz@dealer.com.

Learn More About Larry at larryprintz.com

 

Contact Us About AMG®


Schumacher European, Ltd.

18530 N. Scottsdale Road
Directions Phoenix, AZ 85054

  • Sales: (866) 947-9082
  • Service: (888) 863-1559
  • Parts: (888) 318-3191

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