To put it politely, the question is this: Has Mercedes-Benz finally learned that power alone is not enough? For years now, M-B’s celebrated AMG division has been turning out exciting cars with outputs to match their breathtaking price tags. Big, bold and brassy, there is no doubting their sheer firepower. But while they have all boasted incredible straight-line speed, they have tended to lack an intimacy that would set them apart from the competition.

The new C63 is meant to change all that. It has been engineered in a program that its director of development, Tobias Moers, promises will challenge BMW’s new M3 for outright driver appeal. “We have left no stone unturned in efforts to provide our new car the necessary qualities to lift it above the competition,” he says, adding that the C63 has more development miles than any other car in AMG’s 40-year history.

The wholesale change in philosophy is no better exemplified than by AMG’s decision to equip the C63 with an electronic stability program (ESP) that can be switched off completely. There’s no cop-out like the system employed on the old C55, which intervenes above a predetermined threshold even when it is supposedly disabled. Hold the button down for longer than three seconds and you disengage the electronic safety net. It continues to operate under braking but disappears under load, setting the scene for lurid oversteer as well as an arcane ability to light up the rear tires in first, second and third gears.

“It was the one thing I really pushed hard to incorporate into the car from the beginning,” says Moers. “It is essential our customers can choose to use every last bit of their cars’ performance.”

The appropriate word here is choose, because as well as being able to turn off the ESP, there is also a special sport mode that sees it continue to operate in the background but at a newly developed threshold that permits you to tease the rear end out without prematurely robbing power from the engine and applying the brakes.

So the C63 is unshackled. The question is, does it make any difference? Oh, yeah. With this car, AMG has achieved a tremendous balance between power and poise. As well as being seriously fast, it also responds intuitively to your actions. Modifications to the third-generation C-Class’ rear-wheel-drive chassis deliver the sort of confidence-inspiring feedback over winding roads that soon prompts you to make the most of the switchable ESP. We can’t remember a more entertaining, more dynamically rounded Mercedes model since the original 190 2.5 Evo.

It starts, as always, with the engine. Out goes the old 5.4-liter V8, its place taken by AMG’s latest 6.2-liter V8. The engine is mounted a half-inch farther back than the regular C-Class engines. The complete front-end structure has been redesigned around a series of radiators—a total of six crammed in on top of each other behind the front-end bodywork where they compete for air fed through liberal openings. (Note to self: Keep the expensive- looking nose away from guardrails.)

The big V8 kicks out 457 hp at 6700 rpm along with a tumultuous 442 lb-ft at 5000 rpm. Central among the chassis changes is the adoption of the front axle from the CLK63 Black Series. Up in length by 1.3 inches over the standard C-Class and boasting redesigned wheel bearings, it adds true precision to the steering, imbuing the C63 with sharper turn-in and greater feedback than any other AMG model.

The suspension, a four-link front and five-link rear arrangement, is related in principle to the standard C-Class but uses more aluminum to keep unsprung weight down. It supports 18-inch wheels shod with 245/40 front and 255/35 rear Pirelli P-Zero Corsa tires.

It’s all clothed in an aggressive-looking body that turns the C63 into a real head-turner. One thing’s for sure: You’ll never mistake it for an ordinary C-Class. There’s a deep front bumper punctuated with enormous cooling ducts and vertically stacked blades at each side to extract air from the oil cooler. The car also has a twin-slat grille, titanium-colored headlight inserts, a restyled steel hood with a pair of power domes and widened front fenders with bulging wheel arches. It looks menacing but contemporary. Added to all this are chiseled side sills, a trunk-mounted spoiler, darkened tail-lamp lenses and a retroflex rear bumper.

The changes continue inside, with contoured sport seats offering electronic cushion adjustments, a terrific flat-bottomed steering wheel with remote shift paddles for the C63’s seven-speed automatic gearbox and new instrument graphics.

Fire the ignition, still activated via an electronic key rather than a starter button favored by some rivals. Ba-ba-ba . . . boom! The engine draws breath before erupting to life with a deep bellow through the exhausts, extinguishing any remaining doubts you might have had about AMG’s mission with the C63. Dial in the manual mode for the gearbox via a button on the center console, draw the stubby shift lever back to engage drive and ease away smartly with a determined stab of the throttle and the sound of rubber straining against the pavement.

There are no cantankerous theatrics from the driveline, just one linear surge of acceleration. The engine responds with alacrity to every request, igniting power and then dousing it as your right foot demands. For all the apparent athleticism, it is smooth, running up to the 7000-rpm redline without any strain. And it is addictive: We found ourselves dropping back a gear at almost every opportunity, just to experience the sheer explosiveness concentrated in the upper reaches of the rev range. All the while the heavy-metal soundtrack hardens in concert with the V8’s howl.

The relentless acceleration is as mind-blowing as the epic exhaust note. Mercedes-Benz claims 0 to 62 mph in just 4.5 seconds. That’s 0.3-second inside the time BMW quotes for the new M3 and becomes all the more impressive when you realize you are hauling 3650 pounds. Top speed is nominally capped at 155 mph, however, customers who specify the C63’s optional performance package receive a remapped ECU that extends it to a rather more fitting 174 mph. “It’s geared to do more . . . much more,” says Moers, “but we’ve got to consider the stresses being placed on the tires.”

So it is no lightweight, but it has legs. Having seven gears to divvy up the power helps, of course. Even so, sixth and seventh are heavily overdriven to ensure fuel consumption remains semi-sane. On the early example we drove, however, the C63’s gearbox didn’t do the engine justice. Despite being reworked to provide a satisfying blip of the throttle on downshifts, it was slow to respond to upshift requests. AMG admits it needs work and says a fix is in the pipeline prior to North American sales early next year.

While its engine plays a major role in defining the new Mercedes, it is the determined and entertaining way its chassis deploys its substantial reserves that sets it apart from previous AMG models. It is responsive, communicative and adjustable on the limit—hardly how we’d describe its predecessor, whose bold engine dominated proceedings in such a way that it was to the detriment of the overall driving experience. Pushed hard, the C63 reveals a multifaceted purposefulness we can’t wait to measure against the new M3.

For all its inherent tautness, the ride is acceptable even on pockmarked pavement, with excellent rebound control helping to quell any nasty vertical movement. The front end is superbly damped, too, allowing the C63 to track faithfully without too much unsettling movement over bumps. Before long, you find yourself making big demands on the chassis, marveling at the directness and body control.

It takes a special road to extract its best—better, still, a track where the new AMG’s high limits can be explored in safety. With the new ESP system switched to Sport, oversteer can be dialed up at will. Barrel into a corner hard on the brakes, tap the shift paddle to engage a lower gear and . . . WHAM! A big application of throttle gets the rear swinging out wide. But rather than premature surrender to the commands of the electronics just as the real action commences (as in other AMG models), the C63 follows your instructions. It is terrifically adjustable, the slip angles controlled via the throttle. If all this is not enough, you can switch the ESP off completely, at which point it becomes an even more willing sideways companion.

We won’t see the C63 on these shores until next spring, and prices haven’t been set. We can’t emphasize enough just how much more invigorating AMG’s latest performance hero is to drive. It operates on a much higher level than its predecessor, in terms of performance and overall dynamic prowess. With the M3 waiting in the wings, the scene is now set for a battle royal.