Mercedes-Benz is making ready for maybe an important step in its transition to a direct gross sales to client “company” retail mannequin this 12 months, when it begins the method in its residence market, Germany.
Mercedes stated in 2021 that it had reached agreements with its European sellers to maneuver to the direct-sales mannequin. Gross sales boss Britta Seeger stated that the objective was to promote greater than half of Mercedes automobiles in Europe by company by the tip of 2023.
Mercedes first examined the company mannequin in pilot tasks in Austria, Sweden and South Africa. It went reside with the brand new system within the UK on Jan. 1 — with a splashy promoting marketing campaign geared toward patrons. Germany will observe later this 12 months.
“You flip your self from a wholesaler right into a retailer,” Mercedes-Benz Group CEO Ola Kallenius stated Friday on the automaker’s 2022 earnings name. “It modifications your complete perspective in the way you run the enterprise.”
Promoting on to automobile patrons saves prices for the corporate and removes issues for purchasers that they might get a greater worth at one other vendor, he added.
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 clients.
The company mannequin transfers a lot of these prices to the automakers. Sellers would obtain a hard and fast charge per automobile bought, in addition to income from after-sales. They’d make much less cash per automobile bought however make up the distinction by not having to incur pricey stock and promotional bills.
Automakers which have moved to company in Europe or introduced plans to take action embrace BMW, Stellantis, Volvo and Volkswagen Group (for full-electric autos). Volvo will introduce an company gross sales mannequin within the UK by the tip of this 12 months.
Renault and Toyota have stated they plan to maintain their franchised dealer-based techniques of promoting automobiles.
Kallenius and Mercedes finance chief Harald Wilhelm stated the transfer to an company mannequin would assist assist Mercedes’ revenue targets by reducing distribution prices and offering a basis for rising common promoting costs.
“The switchover to a direct gross sales mannequin must be enabler of managing reductions,” Wilhelm stated. “It’s already gone past expectations in markets the place we’ve already switched.”
Kallenius stated the company mannequin may stabilize pricing and construct belief amongst patrons. “If a buyer makes up their thoughts that they wish to purchase a Mercedes, usually they’re buying round at a number of sellers,” he stated. With company, as a result of the worth is fastened, “You progress away from promoting the worth to promoting the automobile, which must be the case within the premium market.”
Consumers have extra confidence that they’re not lacking a greater worth, which will increase buyer satisfaction, he stated.
Kallenius stated that U.S. franchise legal guidelines made a transfer to company there unlikely, however he stated that Mercedes had reached an settlement with sellers there on funds for over-the-air updates. Homeowners should purchase these updates direct from Mercedes, he stated, “in partnership” with sellers.
Mercedes stated final week that it was “delighted” with preliminary buyer response to company gross sales within the UK, however the course of has not been fully clean in some international locations. Sellers in Australia took Mercedes to courtroom final 12 months searching for compensation for what they stated was misplaced earnings, and sellers in Austria additionally had complaints, based on information reviews.
Reuters contributed to this report