The new GT, which is set to hit showrooms in Germany in March 2015, will give sales of the Mercedes sub-brand a new boost and position AMG as a standalone manufacturer in its own right, Tobias Moers, the unit's chief executive said at an event to launch the car.

"This car represents a milestone for our brand. There are already icons in this segment, and we are happy to take them on," Moers said.

AMG is a sub-brand of Mercedes-Benz which already makes tuned-up versions of the S-Class limousine, G-class offroader and even the A-and B-Class compact cars. It expects to sell more than 40,000 cars this year, Moers said.

Moers declined to give a figure for potential sales of the GT, adding that it will make up less than 20 percent of overall AMG sales, which totalled 32,200 in 2013, and 23,000 in the first half of 2014.

"We can do a four digit figure in annual sales," Moers said about the AMG-GT, declining to be more specific.

With the 510 horsepower coupe, Mercedes is entering a lucrative segment of the market dominated by Volkswagen-owned Porsche, the most profitable manufacturer among the German luxury car makers.

Porsche earned a return on sales of around 18 percent last year. By comparison, Mercedes-Benz Cars, a division which includes AMG, had a return on sales of 6.2 percent in 2013, lagging Audi's 10.1 percent and BMW's automotive earnings before interest and taxes (EBIT) margin of 9.4 percent.

Moers declined to provide a specific figure for AMG's overall return on sales.

PRICE TAGE

The new AMG-GT will cost between 97,000 and 112,900 euros (77,897 pounds-90,642 pounds) when it is launched in Germany, and will be positioned as the brand's new flagship. This is less than the SLS gullwing model, which cost around 187,000 euros, but which has since been discontinued, Moers said.

The AMG-GT will see its U.S. launch within three months of the car's release in Germany, AMG said.

To help lure Porsche buyers, the car is designed to compete on the track, Moers said, adding the car achieved a lap time of seven minutes and 36 seconds on Germany's Nordschleife, the infamous northern loop of the Nuerburging racetrack.

On racing tires, the car even managed a lap time of seven minutes and 32 seconds, Moers said.

Moers also said the company was working on a new strategy.

For now, AMG will remain a niche offering, achieving annual sales well below the 155,094 vehicles Porsche sold in 2013.

Among the German premium auto makers, BMW led the pack last year, with 1.65 million BMW branded cars sold worldwide. Audi was next at 1.57 million and Daimler in third place, with 1.47 million Mercedes-Benz branded cars sold.

(1 US dollar = 0.7742 euro)

(Reporting by Edward Taylor; editing by Susan Thomas)

By Edward Taylor

Stocks treated in this article : Daimler AG, Volkswagen AG
Valeurs citées dans l'article : AMG, Bayerische Motoren Werke AG, Daimler AG, Volkswagen AG