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    • European Union emission regulations forcing Mercedes to scale back AMG significantly?

      If you are wondering why the Germans brands are racing to add hybrid powerplants to everything you can blame the European Union. Strict emissions regulations are coming in 2020 and they will only get tougher to meet.


      this incident demonstrates the contortions carmakers are planning to perform to pass Europe’s strict emissions rules, which come into force at the turn of the year and require them to lower average CO2 output to 95g per kilometre.To hit the targets, they must sell a large number of electric cars that the vast majority of motorists have so far shown scant interest in purchasing.
      Mercedes-AMG is in quite the pickle:

      Last month Daimler revealed a gulf between its current emissions of 138g/km and its target of roughly 100g/km.“What we can’t control is buyer behaviour, but we have the technologies within our portfolio to get within target range,” chief executive Ola Kallenius told investors in London last month.

      The German group is expected by many dealers to cut production of its most polluting models. In its crosshairs is the Mercedes AMG range, its highest-specification models that have supercar acceleration and the body of a family saloon. A reduction of 75 per cent in the availability of some models within the AMG range is expected by several retailing executives, who spoke on the condition of anonymity.

      This poses a serious profit risk. While it never breaks out the division’s earnings, AMG is believed by analysts to be a significant contributor to the bottom line. “If they kill off AMG it’s a catastrophe for profitability,” says Bernstein’s Mr Warburton.
      If AMG is scaled back or possibly killed off entirely Mercedes is in huge trouble. Obviously it is not just Mercedes that will have a problem with these new regulations but it looks like all German automakers with high performance brands are going to find it very tough to compete.

      Let's hope Mercedes finds a solution or regulations are loosened. If neither happens, AMG and enthusiasts will lose out on a brand that is at the best point in its history.


      Source

      This article was originally published in forum thread: European Union emission regulations forcing Mercedes to scale back AMG significantly? started by Sticky View original post
      Comments 3 Comments
      1. nbrigdan's Avatar
        nbrigdan -
        Click here to enlarge Originally Posted by Sticky Click here to enlarge
        The German group is expected by many dealers to cut production of its most polluting models. In its crosshairs is the Mercedes AMG range, its highest-specification models that have supercar acceleration and the body of a family saloon. A reduction of 75 per cent in the availability of some models within the AMG range is expected by several retailing executives, who spoke on the condition of anonymity.
        So E63 and AMG GT 4-door on the chopping block? Obviously the first models to go *should* be the AMG SUVs, but that would be devastating to profit margins. Next most obvious target are the 65 AMG models with the antiquated V12. Again, that would hurt the bottom line (75k USD extra to get a less sophisticated V12 in the same chassis as a V8). It's sad to see this happen, hopefully the North American market can help prop AMG sales up if they have to decrease those in Europe. (Or is it global?)
      1. Sticky's Avatar
        Sticky -
        Click here to enlarge Originally Posted by nbrigdan Click here to enlarge
        So E63 and AMG GT 4-door on the chopping block? Obviously the first models to go *should* be the AMG SUVs, but that would be devastating to profit margins. Next most obvious target are the 65 AMG models with the antiquated V12. Again, that would hurt the bottom line (75k USD extra to get a less sophisticated V12 in the same chassis as a V8). It's sad to see this happen, hopefully the North American market can help prop AMG sales up if they have to decrease those in Europe. (Or is it global?)
        The whole thing is stupid. The EU is going to kill the German car brands which will hurt the German economy and then the EU.

        Whatever, American cars are only getting better and better.
      1. nbrigdan's Avatar
        nbrigdan -
        Click here to enlarge Originally Posted by Sticky Click here to enlarge
        The whole thing is stupid. The EU is going to kill the German car brands which will hurt the German economy and then the EU.
        They are essentially saying emissions are more important than jobs. Which I guess is a fine stance...if EU emissions even mattered in the grand scheme of things. Until China, India, and the US start curbing emissions there will be no change at a global level. They are essentially just killing their own economy for no benefit.