Daimler AG, the maker of Mercedes-Benz vehicles, is in talks to sell four of its German outlets and possibly more later on, as part of a new cost-cutting plan according to a Reuters report. Roughly half of Mercedes’ retail sales in Germany go through its own retail network made up of 98 dealerships, while rivals Audi and BMW rely more on franchises.
BMW owns 43 dealerships that contribute only about a quarter of its volumes in Germany, while Audi’s 16 in-house outlets account for less than 10 percent. Mercedes CEO Dieter Zetsche is targeting the company’s own retail operations as part of a promised €2 billion ($2.6 million) savings drive.
“Management wants to try this out to see exactly how it would work in practice. They are gathering experience that could serve as a blueprint,” an unnamed source close to Daimler told Reuters, adding that Zetsche is no fan of own retail.
Daimler is in talks to sell two dealerships in northern Germany and two more in the west of the country to existing franchise holders. By dropping more outlets, Mercedes could cut its retail staff of 16,000 people and associated costs including vacation pay, Christmas bonuses, corporate pensions and profit shares, advantages that are very uncommon for employees of franchised dealerships.
“There is currently no final concept for restructuring the group’s own retail network in Germany, but different options are still being evaluated,” the company said in a statement, declining to comment specifically on disposals.
Penske Automotive Group is reportedly one of the companies interested in buying Mercedes showrooms, as the company recently bought some Italian BMW dealerships.
By Dan Mihalascu
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