Mercedes-Benz E63 AMG

Price: £70,000 approx.
Engine: hand-built 6.2 litre V8, 525 horsepower, 630 newton metres of torque
Transmission: seven-speed wet-clutch automatic
Top speed: 155mph (artificially limited)
Acceleration: 0-100km/h (62mph) in 4.5 seconds
Fuel consumption: 22.4mpg (combined cycle)
CO2 emissions: 295g/km
Rivals: BMW M5, Jaguar XF-R, Porsche Panamera

This is a great time to be a Mercedes fan. After a decade of mis-steps and stumbles chasing niches with all sorts of pointless crossovers, SUVs and people carriers, the company has its eye firmly back on the ball; the current versions of the core saloon models - the C-Class, E-Class and S-Class - are all once more among the best products in their respective markets. Above all, these cars look and feel like proper Mercs again too. These days, Mercedes' new model introductions are once more events to be greeted with eager anticipation rather than trepidation; in the case of the the E63, designed by the company's in-house performance operation, AMG, that eager anticipation was more than justified.

It is easy to suppose that combining the excellent new E-Class with AMG's thrilling high-revving hand-built 6.2 litre V8 engine, and a series of other performance modifications, was always bound to produce an outstanding car, but this is very far from being the case. The standard E- Class is both sweet and sharp to drive but offers extremely high levels of comfort as well. AMG's great achievement has been to produce an uncompromising competitor for BMW's M5, Jaguar's XF-R and Porsche's new Panamera without ruining those qualities. Fitting a bigger engine, wider tyres, sportier suspension and aerodynamic aids to this car could so easily have turned it into a tiring, noisy, chavved up, hard-riding, bone-shaking, tram-lining mess – but it didn't, a fact that points to the exceptional quality of AMG's development work.

That work by AMG, incidentally, now starts at an earlier stage in the development of the base car than it ever did before – that means today's standard E-Class is probably better than it otherwise would have been without AMG's involvement, and also better able to accommodate the AMG-specific modifications for the E63.

In order to understand what makes the E63 AMG so impressive, it's probably worth homing in on a few technical highlights. The first of these is the 6.2 litre engine – the precise capacity is 6208cc, by the way, so the 6.3 litre badge on the car's flanks represents a small, but forgivable piece of exaggeration. A few years back, AMG dropped its supercharged 5.5 litre V8 engine, in favour of this larger, high-revving naturally aspirated type, which delivers more power but a bit less torque. In making this shift, AMG was very much swimming against the tide; several manufacturers, including Mercedes itself where its mainstream cars are concerned, have been adopting smaller supercharged or turbocharged petrol and diesel engines in pursuit of fuel economy.

No matter. The results are what count; in the E63 this engine is wonderfully free-revving, whipping the car up to its artificially limited top speed of 155mph with enormous ease. And it's likely to withstand a lifetime of such treatment without too much trouble. Each one is assembled by a single named mechanic in a very clean factory at AMG's headquarters in Affalterbach near Stuttgart. I've seen this for myself and I'm sure there are dirtier operating theatres – and not just in failing NHS hospitals. Nearby, development engines run on test-beds for days on end at full throttle, their exhaust systems glowing red and orange from end to end; failures, apparently, are rare.

This engine is paired with a seven-speed multi-clutch automatic transmission; the multi-clutch set up replaces the torque converter on a normal automatic and is supposed to reduce weight and power losses, as well as ensuring zingier gear changes. Broadly speaking, it works, although like Mercedes' conventional seven-speed automatic, it can occasionally produce the odd jolt when it tries to push through a series of rapid downchanges.

Finally, there is the E63 AMG's unusual mixed suspension set-up, which consists of steel springs at the front but air suspension, incorporating self-levelling, at the back. Unusual it may be, but again, it works. I can think of only one other car which employed a similar mixed system – the four-wheel drive version of Peugeot's 405, which had steel springs at the front and Citroen-style oleo-pneumatic suspension with self-levelling at the rear. Perhaps it is just a coincidence but that car had great ride comfort and on-road behaviour as well.

Anyway all of these systems can be fiddled with and adjusted by the driver. The suspension, for example, can be switched between 'Comfort', 'Sport' and 'Sport plus' modes, while the transmission has 'C', 'S', 'S+' and 'M' settings. 'C' provides a softer throttle response than the others which involve more aggressive shift patterns ('M' is for manual). Given that the car is terrifically fast but acceptably smooth in all of the transmission modes. and rides well in 'Sport Plus' while remaining wieldy in 'Comfort', I'm not sure all of this choice is terribly valuable.

Finally, the car's appearance. The E63 AMG looks considerably more purposeful than the standard car, but you'd be hard pushed to point to the specific bodywork alterations that have been made in order to achieve that effect; that's because the sometimes significant changes involved – the front wings are wider than those of the standard E-Class for example, in order to accommodate the AMG's wider front track – are so well integrated.

Overall, the E63 AMG succeeds – not least because, although it's a fiery autobahn mile-muncher, it's still an E-Class.