Speed demons rejoice – there's a new-and-improved performance car coming to Canada, courtesy of AMG, Mercedes-Benz's high-performance division. It's the 2012 M-B E63 AMG, available in a sedan or wagon.

However, environmentalists need not despair – despite the power boost, the engine is downsized and, as a result, the CO2 emissions and fuel consumption have dropped by 22 per cent thanks to high-tech systems such as direct fuel injection, twin-turbocharging and air/water intercooling.

"In 2008, we made a promise to reduce fuel consumption and CO2 emissions by 30 per cent by the year 2012, by a further 20 per cent by 2015. We can say today we're on track. The fuel consumption for the E63 is 9.8 litres/100 km and that is 2.8 litres less than before. … This makes the new E63 the most powerful, fuel-efficient high-performance E-Class ever and the leader in the segment," says Christopher Jung, senior manage, Mercedes-AMG vehicles series, before our test drive near Marseille, France.

The setting is an ideal backdrop for the E63 AMG to strut its stuff, but the vehicle really shines on the track. The Circuit Paul Ricard HSTT (high-speed test track) can be configured in 196 different ways; for our test, it is set up as a 3.6-kilometre stretch with long, open straightaways and intricate hairpin turns.

AMG's philosophy is One Man – One Engine. A single technician handcrafts every engine at AMG's state-of-the-art manufacturing plant; the powerful engines are all hand-built and they're wonderful. The new AMG powerplant is a 5.5-litre, twin-turbo V-8 that produces 518 horsepower and 516 lb-ft of torque. The outgoing model had a 6.2-litre naturally aspirated V-8 engine that delivered 518 hp and 465 lb-ft of torque.

My test sedan comes with an added bonus – an AMG Performance Package ($6,800) that raises the specs to an impressive 550 ponies and 590 lb-ft of torque. It also adds extra touches such as red-painted brake calipers, a carbon fibre spoiler lip on the trunk of the sedan, forged 19-inch AMG twin five-spoke wheels and a funky flat-bottomed steering wheel with black alcantara in the grip area, which keeps your hands firmly in place.

We hit the track with Norman Simon, AMG Driving Academy instructor, in the lead car, a SLS AMG, followed by three journalists in AMG E63 sedans – a renowned Quebec racer, another veteran pro, and myself. Hit the throttle and the power is instantaneous, whipping you into the back of your seat with brute force. The car will do 0-100 km/h in 4.2 seconds.

Even during our first warm-up lap, we hit speeds in excess of 150 km/h. Switching the transmission modes from Sport, Sport plus, and manual further enhances the car's agility; the result is shorter response times, higher engine speeds and more spontaneous gear changes. You can also switch the suspension modes between comfort, sport, and sport plus with the touch of a button.

An AMG speed shift MCT, short for multi-clutch technology, seven-speed automatic is new as is the shift lever with an embossed AMG badge on the centre console. It's funky, yet easy to use. By the fourth lap, we're hitting 200-plus km/h.

And the sedan can take it; it remains well-balanced and sure-footed at all times. Hit the brakes and it stops on a dime. In the corners, the tires grip the pavement like glue. I briefly lose sight of the SLS pace car – but the Quebec racer remains on his tail, keeping up to the SLS without hesitation. I stick to the driver ahead. I won't run the risk of getting ridiculed for not keeping up with the guys. After five quick laps, it's time to return to pit lane, my heart beating out of my chest. I get kudos from colleagues and the instructor for keeping up with the guys.

Off the track, our ride is an E63 AMG wagon on the scenic route. Despite the additional weight (1,945 kg in the wagon versus 1,840 kg in the sedan) it, too, is a comfortable, smooth ride with minimal body lean when cornering.

It flies under the radar, until you hit the throttle and the exhaust note roars to life. Personally, I prefer the wagon over the sedan because the sound of the exhaust is more pronounced. In the sedan, it's a little muffled by the rear seats and closed trunk. The open cargo area makes the deep grumble from the exhaust echo beautifully in the cabin.

The base E63 AMG sedan now comes standard with nine airbags and a driving assistance package that includes blind spot assist, which warns you when a vehicle is in your blind spot and it's unsafe to make a lane change, and passive lane keeping assist, which warns you when you're crossing the lane unintentionally. The wagon also now comes with a power tailgate and a rear-view camera as standard equipment. You can add a premium package with climate comfort seats, keyless go, roller blinds for the rear side windows and heated rear seats.

The colour combinations are lovely, too. My wagon's diamond white metallic exterior is a stark, yet attractive contrast against the black leather interior. The mystic red metallic on my sedan set against the platinum white leather interior is also an attractive combo.

From the exterior, only a few subtle details distinguish the AMG from its less-powerful siblings including the small "V8 Biturbo" decal. The interior is breathtaking, although I'm not fond of the location of some functions – the turn signal stalk is too close to the cruise control stalk, making it easy to engage accidentally.

The E63 AMG will hit Canadian dealers this October. Prices start at $106,900 for the sedan. Expect to pay a few thousand more for the wagon.

globedrive@globeandmail.com

2012 Mercedes-Benz E63 AMG

Type: Four-door luxury, high-performance sedan or four-door luxury, high-performance wagon

Base Price: $106,900 (sedan)

Engine: 5.5-litre, twin-turbo, DOHC, V-8

Horsepower/torque: 518 hp/516 lb-ft (550 hp/590 lb-ft with AMG Performance Package)

Transmission: Seven-speed automatic

Drive: Rear-wheel

Fuel economy (litres/100 km): Not available; premium gas

Alternatives: BMW M5, Audi S6