<P> AMG models typically have more aggressive looks, a higher level of performance, better handling, better stability and more extensive use of carbon fibre than their regular Mercedes - Benz counterparts . AMG models are typically the most expensive and highest - performing variant of each Mercedes - Benz class . </P> <P> AMG variants are usually badged with two numerals, as opposed to regular Mercedes - Benz vehicles, which have three (e.g., C 63 as opposed to C 350). Traditionally, the two numerical digits signified the engine's displacement size, however, recent models have deviated from such correlation . </P> <P> AMG was founded as a racing engine forge in 1967 under the name AMG Motorenbau und Entwicklungsgesellschaft mbH (AMG Engine Production and Development, Ltd .), by former Mercedes - Benz engineers Hans Werner Aufrecht and Erhard Melcher in Burgstall an der Murr, near Stuttgart . The letters "AMG" stand for Aufrecht, Melcher and Großaspach (Aufrecht's birth town). In 1976 most of AMG moved to Affalterbach, with the racing - engine development remaining at the old location in Burgstall . At this time Erhard Melcher ceased to be a partner, but continued to be an employee at the Burgstall location . </P> <P> In 1993, with AMG having become a high - profile purveyor of modified Mercedes - Benz cars, Daimler - Benz AG and AMG signed a contract of cooperation, allowing AMG to leverage Daimler - Benz's extensive dealer network and leading to commonly developed vehicles (the first one being the Mercedes - Benz C36 AMG, in 1993). On 1 January 1999 DaimlerChrysler, as it was called between 1998 and 2007, acquired 51 percent of AMG shares, and AMG was renamed to Mercedes - AMG GmbH . Racing engine development was divested and continues to exist in Burgstall under the name HWA (Aufrecht's initials). On 1 January 2005 Aufrecht sold his remaining shares to DaimlerChrysler, and since then Mercedes - AMG GmbH has been a wholly owned subsidiary of Daimler AG . </P>

What does amg mean on a mercedes benz