Mercedes' performance divisions says it will focus on weight reduction and engine optimization to boost performance. Volker Mornhinweg, head of AMG, also hints that AMG will look to produce a coupe version of the upcoming A Class.

"The horsepower war is over," declares Volker Mornhinweg, head of Mercedes-Benz's performance division AMG.

AMG says that it will now focus on a lower emissions strategy for all future models. Mornhinweg says the tuner will pursue technologies that create improved performance and economy by reducing curb weight and optimizing engines and transmissions.

As an example, Mornhinweg announced that the new Mercedes E63 AMG, set to make its debut later this year, will be lighter than the previous model and will come with a manual "wet-clutch" gearbox for better fuel economy.

Mornhinweg says that the company is looking to produce a smaller model too. Musing that the tuner was looking to take on the upcoming Mercedes A Class and turn it into an AMG coupe in a performance version of Mercedes-Benz's entry-level model.

AMG, according to Mornhinweg, is also looking at diesels, hybrids and 4-cylinder gasoline engines to introduced into its high-performance Mercedes-Benz variants.

So, AMG is going green and unilaterally invoking a cease-fire on the horsepower wars. Now, someone should tell BMW and Audi.