The second category is for regular cars that have been transformed into something worlds apart from their original form, machines such as the Subaru WRX STI, HSV GTS or BMW M3 that take root in ordinary vehicles but offer extraordinary thrills.  

The new Mercedes-AMG C63 S fits firmly into the latter group, and it may just be the best of its kind. Thunderous, thrilling and confidently composed on the road, the new model blends the heart of a supercar with an unassuming sedan or wagon body that looks similar to the scores of regular C-Class models running around with AMG dress-up kits but offers a level of performance well beyond what motorists could reasonably expect from a family car.

The current Mercedes-Benz C-Class is a segment benchmark, a fine car even in basic four-cylinder C200 grade. That machine costs $60,900, so buyers have the right to expect plenty for their dollar given the model's hardcore AMG brother starts at a whopping $154,510 plus on-road costs in sedan form or $157,010 as a more practical wagon.

The AMG builds on C-Class staples such as autonomous emergency braking, climate control, front and rear parking sensors, a reversing camera and tablet-style centre display screen, adding luxuries including sports seats, 19-inch wheels, LED lights, Nappa​ leather upholstery and a panoramic sunroof as standard.

It has a 13-speaker Burmester surround sound stereo, door sills with illuminated AMG logos, a 360-degree camera, colour heads-up display, memory seats and an interior finished in a mix of black open-pore wood trim with bright aluminium highlights.

It's a luxury car, then. One with a surprisingly short options list.

Customers looking to stand out from the crowd can spend $7900 on an "Edition 1" pack that brings black wheels with red lips that complement red interior highlights and grey sports stickers along its flanks, or go further with the $8900 exterior carbon-fibre package that spreads glossy pieces of the evocative trim across the model's bodywork.

Cheaper choices include $990 mesh-look alloy wheels available in black or silver, along with $1490 option that replaces black wood trim with carbon fibre in the cockpit. That money would be more useful going toward upgrading from the sedan to the brand's practical Estate bodyshell, an option that offers more than 1500 litres of storage with the seats folded flat, along with the ability to carry much larger items than the four-door variant's boot can swallow.

We drove the car in wagon form and regularly threw a glance over the back seat to check that we were still driving a family-friendly five-door and not a pure sports car – blindfold a passenger for a spirited drive and you could easily convince them that the C63 is something much more exotic than a junior luxury car with an excess of power.

While the AMG's extras play an important role justifying the price gulf separating the C63 S from regular C-Class models, the reality is that many of those gadgets will be forgotten the moment drivers prod its metallic start button and hit the road for the first time.

That's because the C63 has the heart of a lion, a twin-turbocharged 4.0-litre V8 shared with the new AMG GT, a motor set to form the core of the brand's performance range in years to come.

The engine replaces a naturally aspirated 6.2-litre V8 that was one of the great characters of the motoring world, a boofy and big-hearted brute of a powerplant equally at home lazily lugging through traffic or cutting loose with unbridled ferocity when given its head.

Mercedes engineers sought to retain that personality in the new engine, which represents the brand's attempt at responsible downsizing.

They are not the only group to do so, as BMW has swapped V10 and V8 power for forced induction eight and six cylinder motors in the M5 and M3 respectively, while Audi exchanged a twin-turbocharged V10 for a similarly force-fed V8 in the RS6 and is rumoured to be dropping the current RS4's free breathing V8 for a smaller turbocharged six in the near future.

Mercedes-AMG might have done the best job yet of giving a performance car an eco-conscious heart transplant that keeps the character traits of its predecessor. The four-litre's full-bodied bellow, blurted gearchanges and crackling over-run form a conversation with occupants that drivers will want to repeat as often as possible, while 375kW and 700Nm outputs lend it the muscle of an engine roughly twice its size.

The 7.0-litre lump under the bonnet of HSV's discontinued W427 was the largest V8 to grace Australian shores in recent years, and that model produced significantly less torque but the same power as the new C63, using exactly double the Mercedes' 8.4L/100km fuel figure to do so.

Progress is a beautiful thing.

Capable of reaching 100km/h in four seconds before running into a 290km/h speed limiter, the C63's startlingly urgent acceleration is backed up by serious hardware designed to keep drivers on the road.

That motor is mated to a seven-speed automatic transmission that offers crisp shifts at the touch of cool metallic paddles fixed to the back of a steering wheel trimmed in leather and suede-like microfibre. As is the tradition for AMG, the combination drives the rear wheels through a locking differential that enables lurid powerslides in the right circumstances.

Multi-mode suspension with variable-valve shock absorbers give a surprising degree of compliance on broken surfaces in comfort mode or lightning-fast reactions when dialled into sport or race settings.

It's quite docile in comfort mode, with significant tyre roar the only signal that you're driving something special. Race mode is appropriately ferocious, and Sport sits somewhere in the middle. In a development that takes a leaf out of BMW's workbook, the C63 is the first AMG that offers drivers an "individual" mode that stores favourite driveline, suspension, stability control and exhaust settings in an easily accessed mode. The car features sticky Michelin Pilot Super Sport rubber that offers prodigious grip, along with a clever stability control system home to a sports mode that allows drivers to wag its tail with the protection of an electronic safety net.

Track-happy enthusiasts can splash out to the tune of $9900 on carbon-ceramic front brakes shared with the AMG GT supercar, though a brisk drive along the Victorian coastline suggests the standard six-piston stoppers can cop plenty of the punishment owners are likely to dole out.

Edgy and alert on the road, the C63 remains incredibly satisfying on a brisk drive. Having first met the car on the hallowed tarmac of Mount Panorama, we tested its abilities in the real world on a loop that took in the Great Ocean Road, where the newest AMG impressed not only with its performance, but also its poise.

The beauty of this car is that it's perfectly capable of playing two roles. The C63 can shrug off daily duties with none of the drama put forward by more focused sports cars, yet it's capable of thrilling drivers to a degree few machines can match on the road.  

Dedicated to driver satisfaction but able to handle daily tasks with ease, the Mercedes-AMG C63 remains a benchmark for the performance car breed.

Price: From $154,510 (sedan) or $157,010 (wagon) plus on-road costs

On sale: Now

Engine: 4.0-litre twin-turbo V8 petrol

Power: 375kW at 5500-6250rpm

Torque: 700Nm at 1750-4500rpm

Transmission: 7-speed auto, rear-wheel-drive

Fuel use: 8.6L/100km (sedan), 8.7L/100km (wagon)

Performance: 0-100km/h in 4.0s, 290km/h (sedan).