Presented in Affalterbach, Germany Tuesday, the Mercedes-AMG GT will be replacing the AMG SLS which was discontinued this year. It will come with a $129,000 price tag, about $70,000 less than what the SLS was retailing for, but it is by no means a watered down version of its predecessor.

The GT shares the same layout as the gull-winged SLS: a two-seater rear-wheel drive vehicle fitted with a front-engine V8. However, the GT is smaller and lighter, which is mostly how Mercedes-Benz and AMG were able to bring down its costs.

The new Mercedes-AMG sports car will come in GT and GTS trim levels. The base-level GT is capable of 456 horsepower, going from zero to 60 mph in 3.9 seconds, while the GT S offers 503 horsepower and can go from zero to 60 mph in 3.7 seconds. Top speed for the GT is at 189 mph while the GT S steps this up to 193 mph, thanks to an all-new 4.0-liter twin-turbocharged V8 engine.

As a smaller but just as snappy brother to the SLS, the GT is in a position to take on the Jaguar F-Type and the Porsche 911. This is also right in line with CEO Dieter Zetsche's plans of taking back the top spot as a luxury car brand, creating edgier compact vehicles to dispel the notion that "a Mercedes is an old man's car." So far this strategy is working, bumping up sales figures for Mercedes in the first eight months of the year.

"We are venturing out into a challenging sports car segment with its top-class competitive field. This is an incentive and motivation for us at the same time to prove to sports car enthusiasts around the world the kind of performance that AMG is capable of," said Thomas Weber, global research and development head for Mercedes.

AMG is Mercedes' performance unit and the GT is its second exclusive model. Sales have doubled for AMG in 2013, overtaking its annual target four years early. According to unit chief Tobias Moers, deliveries will exceed 40,000 for 2014. By creating vehicles beyond special versions of existing Mercedes models, AMG has increased Daimler's chances at competing with the likes of Jaguar, Maserati, and Porsche.

On display at the L.A. Auto Show in November, the Mercedes-AMG GT S is set to launch in the U.S. in Spring 2015. The base-level GT will come the following year.

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