Mercedes-Benz has reached settlement with its European sellers to transition to an company mannequin, wherein prospects would purchase instantly from the automaker somewhat than the supplier, the model mentioned Friday.

The settlement with the European Affiliation of Mercedes-Benz Sellers, or FEAC, creates a framework to introduce the change, which might have an effect on passenger automobiles and vans.

Britta Seeger, the Daimler administration board member liable for gross sales, mentioned that by the top of 2023, greater than half of recent Mercedes autos out there in Europe “must be bought underneath the company mannequin.”

The company mannequin is anticipated to be rolled out in Germany, Europe’s largest auto market, in addition to the U.Ok., by 2023, Mercedes mentioned.

“With this settlement we’re creating a transparent and predictable framework for European gross sales,” FEAC President Friedrich Lixl mentioned in a press release.

Daimler CEO Ola Kallenius mentioned in an interview with Automotive Information Europe in June that the company mannequin can be put in place in numerous European international locations, as a part of a wider digital transformation of the promoting course of. 

Pilot initiatives have been performed in Austria, Sweden and South Africa, Mercedes mentioned.

Within the present retail mannequin, sellers purchase their inventory from automakers and assume prices of promotion in addition to holding stock. They make earnings from the margin on autos bought, however that margin can range relying on negotiations with particular person prospects.

The company mannequin transfers a lot of these prices to the automakers. Sellers would obtain a charge per automobile bought, in addition to income from after-sale providers. They might make much less cash per automobile however make up the distinction by not having to incur pricey stock and promotional bills.

A lot of different automakers that promote in Europe have signaled their intention to modify to the company mannequin, partly to chop distribution prices and in addition to have larger management over the promoting course of. 

Stellantis, created this 12 months from the merger of PSA Group and Fiat Chrysler Cars, has canceled supplier contracts as of June 1, 2023, in preparation for shifting to company gross sales by 2026.

Volkswagen Group makes use of an company mannequin to promote electrical autos, from VW model’s ID lineup and Audi.

Mercedes mentioned that advantages for purchasers would come with larger value transparency and a bigger number of autos on-line. For sellers, “The brand new company mannequin provides companions the chance to pay attention much more than earlier than on prospects and their help,” the automaker mentioned.

It envisions the gross sales course of as a mixture of digital and bodily contact factors: Some patrons would nonetheless wish to go the normal route and begin by visiting a dealership, whereas others may conduct the entire course of on-line, together with a digital tour or check drive of the autos.

“We wish to make it as straightforward as doable for our prospects to work together with us,” Seeger mentioned within the launch. “It doesn’t matter if it’s digital or bodily.”

Due to U.S. franchise guidelines, it’s unlikely that Mercedes might attain the identical settlement with its sellers there.