It’s actually logical. Remember that Audi completely changes the model designation when you bump up the performance, so your old A4 became an S4 and the “S” designated Audis were pretty much the top end performance Audis for us in the US.
Using current designations (which is another story in branding), you would have people shopping the 330i, C300, and A4. But when you go to shop the 340i, C400 (which is currently skipped due to branding), and then the “Congratulations! Your A4 has evolved into S4!” *confetti and glitter*, then its apparent which car has the sales advantage. You know what other line of well known performance branded luxury cars completely separates their models from the regular line up? M cars!!
AMG doesn’t actually separate the models, but they do go from three digit numbers to two digit numbers. Expect that to change very soon and the 43 models be separated from the regular cars.
The US is EXTREMELY sensitive to branding, so something as small as people believing Audi S and BMW M are still direct competitors is very real. Thus you will end up with the M340i and AMG C43 (because C450 AMG didn’t take the branding far enough) being created to get the performance arms on the cars and to be Audi S4 competitors.
This is where it gets even more tricky. These are $50,000-plus “luxury sport vehicles.” Many people may not have a more hardcore daily driver than these cars and they are around the performance limit for legal US roadway driving and exceed at least 90% of the other cars on the road.
When these cars are actually using parts and being “touched” by the automaker’s performance arm then they should be branded as such! I mean a W203 C55 AMG made 362 hp and was over $50,000. An E46 M3 made 333 hp, did 0-60 mph in around 5 seconds and was another vehicle around that $50,000. A B7 S4 made 340 hp and started at just under $50,000.
Now an AMG C43 makes 362 hp (coincidence?), a BMW 340i makes 320 hp (bet that hits 333 hp or 338 hp in M340i trim), and an Audi S4 makes 354 hp. All start around $50,000. They are pretty much the direct successors to those top performance variants, except now they are pulling 4.5 second 0-60 mph times where 5.2 seconds was mind blowing, get about 6-10 mpg better fuel economy with the same type of driving, and are way easier to live with! The only thing holding these cars back are “1LE” style track packages and a manual. Boom, W203 C55 = C43, E46 M3 = M340i, B7 S4 = S4. Price, prestige, power but more performance.
That’s the story of AMG 43 (and eventually 50 and 55) as well as BMW M Performance. It’s Audi’s fault for not moving “S” up and bringing in the “RS” for all their future lineup. This is also how we ended up with V-Sport, F-Sport (in theory), and whatever Infiniti “Red Sport” is.