Chicago Auto ShowCHICAGO – The unveiling of the ’06 ML63 and R63 high-performance cross/utility vehicles at the Chicago auto show here represents a watershed for Mercedes-AMG GmbH, the well-known, in-house tuning division of premium auto maker Mercedes-Benz.

The vehicles use a storming 503-hp DOHC V-8, the first engine ever developed entirely by AMG. To now, AMG engines have been tuned versions of existing Mercedes powerplants.(See related story: Mercedes Launches Two New AMG Models )

The R63 makes the 13th AMG model available in the U.S. and is one of 16 AMG models available worldwide. As the AMG lineup proliferates, company executives admit they walk a tightrope between the desire for growth and the need to retain AMG’s exclusivity.

The launch of the mighty 6.3L V-8 denotes a change in AMG’s powertrain direction. Currently, AMG uses a mixture of naturally aspirated and supercharged 5.5L V-8s and a twin-turbocharged 6L DOHC V-12.

The move to the new, naturally aspirated 6.3L V-8, says Volker Mornhinweg, named last July as AMG chairman, marks the company’s future emphasis on displacement over forced induction. (See related story: DC Appoints New AMG Leader )

For the foreseeable future, AMG will continue to use turbocharging for V-12 models but is phasing out supercharging as a means to generate the thunderous torque its customers crave.

“When you want horsepower and torque, you have to have displacement,” Mornhinweg says. “It’s a shift,” in AMG’s strategy, he admits.

But Mornhinweg and Mario Spitzner, director-AMG brand marketing and sales, agree that supercharging appears to be losing its attractiveness, largely due to lack of refinement.

“We’ve done everything we can do with the technology,” says Mornhinweg. “Supercharging, for the moment, we think is done.”

The move from the 5.5L supercharged V-8s to the new AMG-developed 6.3L signals the new thinking about torque development.

“We still want to be the torque champions in our class,” says Mornhinweg.

That means displacement.

Meanwhile, he says the future of forced aspiration is turbocharging – the reason the twin-turbo V-12 likely will remain indefinitely in AMG’s future. But Mornhinweg says there is room, in the future, “for something in between.”

That tweener definitely will be a V-8, but he is unwilling to say whether the as-yet unannounced V-8 will be naturally aspirated or turbocharged. Or both.

He says the hulking new 6.3L V-8 fits in body shells as small as the current C-Class (the AMG variant uses the supercharged 5.5L V-8), but he admits the 6.3L is not a small engine. Thus the future need for something smaller and perhaps lighter.

And although AMG has offered a diesel-powered model in Europe (the C30 CDI AMG), Mornhinweg and Spitzner appear lukewarm to the notion of future diesel-motivated AMG models.

“It is very expensive to develop a high-performing diesel,” Mornhinweg says. “We have two good (AMG diesel) markets (Italy and France),” but the overall market for a high-performance diesel is small, he claims.

What about the V-10s of rivals Audi AG (S line) and BMW AG (M5 and M6)? Is AMG worried about losing the cylinder-count war?

“We have not had one (customer) enquiry about an AMG V-10,” says Spitzner. And Mornhinweg says although BMW’s current 5L V-10 is powerful, it was developed largely through synergies with BMW’s Formula 1 engine development.

Now that Formula 1 is moving to a new V-8 engine formula, he says the BMW V-10 likely has a short shelf life.

“BMW is “on the way to develop a (high-performance) V-8” for next-generation M vehicles, >Mornhinweg says.

Meanwhile, carefully noting the company is cognizant that rapid expansion of its model lineup could dilute AMG’s heritage of exclusivity, he says AMG officials know when enough is enough.

For now, there is no perception of saturation because the specialty division offers just one car in each segment. For example, entry-level sedans are covered by the C55 AMG and luxury roadsters by the SL 65 AMG.

Mornhinweg says customers do not appear to be overly concerned about AMG vehicles’ proliferation, but AMG is studying its options carefully for future growth, as the company has gone from about 5,000 sales worldwide a half-dozen years ago to about 20,000 units last year.

Future AMG growth may come by expanding its niche-within-a-niche, hyper-exclusive “signature” models. For example, the company will offer a CLK 55 DTM cabrio for ’06.

Mornhinweg says the future also may offer an opportunity to create an AMG lineup between the current mainline models and the signature vehicles.