Mercedes cutting dealer number, wants to go direct sale

Mercedes-Benz is overhauling its sales network across Germany and Europe as it moves toward more direct sales.

Car manufacturer executives have confirmed that it will reduce its dealerships by 15 to 20 percent through its home market and around 10 percent worldwide. It comes as part of a plan to secure 25 percent of online sales by 2025 and 80 percent of European sales by 2025 through direct sales or the ‘agency’ model.

Harold Wilhelmon, Mercedes’ chief financial officer, recently said, “We want to get closer to the customer and therefore have better control over prices.” “So we’re moving away from the current dealer role.”

Read more: Mercedes-Benz Fund to cut dealers’ profit margins to support EV transition

Mercedes-Benz currently operates approximately 6,500 Mercedes and Smart sales and service outlets worldwide, of which about 1,000 are located in Germany. Bettina Fetzer, vice president of communications and marketing, said it would cut its German footprint by 2028 and its global footprint by 2025.

“We need less large showrooms in a mature market,” Fetzer said Auto News. “We’re moving away from big showrooms, especially when we go straight to sales. Combining all these efforts gives us a competitive advantage, but the full jump comes when we combine it with direct sales. It gives us a direct management of our customer relationship and we get to know our customers better. ”

As part of its further direct-sales transition, the company will have dedicated outlets of different brands. For example, there will be dedicated Maybach and AMG outlets. Mercedes-Benz has been changing its dealer system for some time and by 2021, it has sold 25 dealerships in Europe.

The Mercedes-Benz agency model allows carmakers to see dealer stock and direct shipments to customers. Dealerships are then tasked with delivering the vehicles and receive a commission on each model sold. They can also make money after the sale.

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