Mercedes to cut dealerships, move to direct sales in distribution overhaul

Mercedes’ significant-conclusion manufacturers will have their own devoted outlets, with a Maybach store in Shanghai, an AMG outlet in Dubai and a G-Class “practical experience” in Austria that provides off-street test drives.

“We have grown the community for our luxurious brand names by 30 percent in recent decades, and this is the direction we will keep on heading,” Fetzer reported. 

Daimler final yr moved to lower expenditures by providing 25 dealerships in Europe, hoping to deliver up to 1 billion euros in money. That was section of a more substantial price tag-reducing prepare declared by Kallenius in autumn 2020, trying to get to minimize operating charges by 20 per cent. It also marketed some German dealerships to a Chinese investor in 2015.

The “rightsizing” shift to trim the range of dealerships will be accompanied by a change to the “agency” immediate revenue model in Europe, in which automakers will specifically invoice consumers.

“All of these initiatives combined give us a aggressive benefit, but the comprehensive leap arrives when we merge that with immediate gross sales,” Fetzer claimed. “This provides us a immediate management of the customer relationship, and we will know our clients even much better.” 

At the very same time, the automaker is targeting 25 % on line income by 2025. “Our customers are acquiring young, wealthier and more electronic,” Fetzer mentioned. “They want to engage with us on several platforms, when and exactly where they want to.”

Beneath the classic retail product, dealerships should finance their individual inventory, promotions and branding. In return they are free to negotiate pricing. 

Beneath the agency product – so named mainly because the automaker acts as the income agent – the automaker owns the stock, invoices the purchaser instantly and funds branding. Dealerships provide the automobile to the customer and receive a commission on each auto and can crank out revenue on immediately after product sales.

More and extra automakers are turning to the company design in Europe, together with Volkswagen Group (for the Cupra brand name and for EVs from VW and Audi). Stellantis has canceled supplier contracts and is negotiating to go to company revenue in 2023. BMW has experimented with agency revenue in South Africa and with electrified products.

Toyota and Renault are among automakers who have claimed they will proceed with the common retail model.