AMG will produce its own version of the new entry-level Mercedes coupe, which is previewed by Geneva's F800 Style concept.
It will become the entry-level AMG, and will provide Mercedes with a rival for cars such as the Volkswagen Golf R and Audi S3.
It’s all part of a move towards attracting new, younger customers to AMG, and it will provide Mercedes with an image-boosting model for the US, where small saloons outsell their hatchback siblings.
Like the Golf and S3, the AMG will use a turbocharged 2.0-litre, direct-injection, four-cylinder petrol engine, with a seven-speed dual-clutch gearbox and four-wheel drive system transferring power to the wheels.
The four-wheel drive system will be shared with the new BLK, a small SUV to rival the BMW X1.
The car is likely to have around 300bhp and up to 220lb ft of torque. But it is also likely to offer a range of standard fuel-saving technologies, including automatic stop-start, brake energy recuperation and a gearshift indicator — all part of a push by AMG to make its model line-up more fuel-efficient.