With today’s hot hatches offering searing performance, any entrant to this segment had better have a worthy offering that will catch the attention of picky buyers. Originally designed as compact cars, these hot little numbers now have outputs that used to be the domain of the so-called V8-engined muscle cars. Now advanced engine technologies and forced induction have enabled BMW and Audi to offer thess performance hatches with outputs of more than 300 horsepower.

Not be outdone, Mercedes has tasked its engineers to come up with a package that will show the rest of the world what a true hatch hatch should be. With the new A-Class already receiving glowing reviews because of its design, Mercedes is upping the ante by tasking no less than its HPE (High Performance Engine) division to develop a powerplant that will surpass the Audi RS3’s 340-hp output. To be installed in the proposed A25 AMG, this engine will benefit from the work of Mercedes’ England-based F1 engineers. Obviously 360 or so horsepower cannot be handled by front-drive alone, so this eminently desirable hot hatch will have all-wheel drive.

Apart from the A-Class AMG, Mercedes also plans to use this superbly-engineered engine in the new CLC-Class.