Mercedes-Benz is overhauling its sales network throughout Germany and Europe as it moves towards more direct sales.
Executives from the car manufacturer have confirmed that it will cut 15 to 20 per cent of its dealerships through its home market and approximately 10 per cent globally. This comes as part of a plan to hit 25 per cent online sales by 2025 and securing 80 per cent of European sales through its direct sales or ‘agency’ model by 2025.
“We want to have more proximity to the customer and therefore have better control over pricing,” Mercedes chief financial officer Harald Wilhelmn recently said. “That’s why we are moving from the current dealer role.”
Read Also: Mercedes-Benz To Cut Dealers’ Profit Margins In Order To Help Fund EV Transition
Mercedes-Benz currently operates approximately 6,500 Mercedes and Smart sales and service outlets worldwide, of which roughly 1,000 are located in Germany. Vice president of communications and marketing Bettina Fetzer said cuts to its German footprint will take place by 2028 while cuts to its global footprint will take place by 2025.
“We need fewer large showrooms in mature markets,” Fetzer told Auto News. “We will move away from large showrooms, especially when we move to direct sales. All of these efforts combined give us a competitive advantage, but the full leap comes when we combine that with direct sales. This gives us a direct management of the customer relationship, and we will know our customers even better.”
As part of its transition to more direct-sales, the company’s different brands will have dedicated outlets. For example, there will be dedicated Maybach and AMG outlets. Mercedes-Benz has been changing its dealer approach for quite some time and in 2021, sold 25 of its dealerships in Europe.
Mercedes-Benz’s agency model will see the carmaker itself own dealer stock and invoice customers directly. Dealerships are then tasked with delivering vehicles and receive a commission on every model sold. They can also generate money through after sales.
