As Mercedes sits on the cusp of adding even more AMG models with its 4Matic all-wheel drive system and Audi’s quattro reigns supreme as a reputation booster, it’s hard not to wonder if BMW will capitulate.

Past rumors suggested there might be a version of the M5 on tap with BMW’s xDrive system, and it could make sense.

Remaining a rear-wheel drive only brand arguably isolates BMW’s M Division from buyers in cold climates, but that doesn’t seem to matter to division head Friedrich Nitschke. “Our philosophy in regards to steering feel and precision is that rear-wheel drive is the best solution,” he said.

Aside from handling, he also said the xDrive system adds up to 198 lbs to a car and points to the M differential as one of the industry’s best.

Nitschke also said that while only offering dual-clutch transmissions in its M cars make sense from a production standpoint, it will continue to offer manuals as long as there is demand.

Finally, he said that there won’t be an M version of the 3 Series Gran Turismo despite the M3 diversifying into sedan, coupe and convertible forms with the new 4 Series nameplate.

The recently revealed 2014 E63 AMG won’t be the only All-Wheel Drive AMG sedan coming from the German automaker says a Mercedes-Benz product manager.

“Upcoming AMG models will be available exclusively with 4Matic in North America,” Christopher Goczan told AutoGuide.com at the recent 2013 Canadian International Auto Show in Toronto. Goczan, a Product Manager at Mercedes-Benz Canada, referenced the new E-Class AMG, and upcoming CLA 45 AMG, which both utilize all-wheel-drive.

The extremely powerful E63 AMG features 550 hp and 531 lb-ft of torque. When you pair that awesome power with its 4MATIC all-wheel-drive system, it can get to 60 mph in under four seconds, a half-second faster than the last generation To give a sportier feel, the 4Matic system in the E-class is tweaked to deliver 67% of the vehicle’s power to the rear-wheels, while the front wheels get the remaining 33%. In the upcoming CLA 45 AMG, the 4Matic system is a little different, sending 100% of the power to the front-wheels until a loss of traction is detected. With a turbocharged 360-hp four-cylinder engine, it’s likely that power will be sent to the supporting rear wheels very often.

All-wheel drive AMG models were normally reserved for Mercedes’ SUV models, like the ML63 AMG and G63 AMG. The E-class as well as the new CLS four-door coupe, are the brands first all-wheel drive performance sedans, and Gozcan promised that they certainly won’t be the last.

Mercedes has also revealed a more powerful E63 AMG S-model, which makes 577 hp and 590 lb-ft of torque. Gozcan explained that S-Model branding will replace the old “AMG Performance Package” that was previously available to AMG vehicles. The S-model changes are far more expansive than just an engine tune for more output. Goczan explained that more performance oriented brakes, exhaust and a limited slip differential will give the E-Class AMG more bite at the track.

This strategy will not interfere with Mercedes “Black Series” vehicles he says, which will still be reserved for exclusive, low-volume performance oriented vehicles.

Mercedes has also revealed a more powerful E63 AMG S-model, which makes 577 hp and 590 lb-ft of torque. Gozcan explained that S-Model branding will replace the old “AMG Performance Package” that was previously available to AMG vehicles. The S-model changes are far more expansive than just an engine tune for more output. Goczan explained that more performance oriented brakes, exhaust and a limited slip differential will give the E-Class AMG more bite at the track.