Mercedes-AMG weighing smaller sports car

The new model would slot beneath the GT and target the Porsche 718 Cayman.

Mercedes' high-performance AMG division is mulling a new sports car that would slot beneath the current GT and serve as the successor to the slow-selling SLC. The smaller AMG sports car has yet to officially receive the green light, but could arrive in dealer showrooms during the early 2020s.

AMG's baby GT is still in its early days of development, so much so that the company hasn't even settled on what form the vehicle will take. A mid-engine layout is currently in the discussion, but AMG also hasn't ruled out a more conventional front-engine layout. Whatever the case, the sports car will send power to its rear-wheels.

AMG is said to also be weighing a dedicated SUV model, but the smaller sports car appears to have the most traction at the moment. AMG is keen to play up its motorsports efforts, and the proposed sports car could help expose the brand to a new demographic.

"It's a rapidly growing business segment and it is high exposure for the brand,” an inside source told Autocar. "From a marketing perspective, it makes great sense, but you also need to ensure that it is financially viable in sufficient volumes and at a price to make it attractive to car buyers on a global basis. It would be additional business for AMG, not targeted at existing customers but new ones.”

Following in the footsteps of recent AMG models, the compact sports car would use a turbocharged 2.0L four-cylinder engine. The top gas offering would have around 400 horsepower. A hybrid version with even more horsepower is also under consideration.