Mercedes-Benz could end discounts under new sales process

Mercedes-Benz is evaluating a radical overhaul of how it sells cars, potentially removing retailers’ freedom to offer discounts as it seeks to create a seamless sales process and grow online sales in the future.

Talking at the Frankfurt motor show, Britta Seeger, head of sales and marketing, highlighted trials that have taken place in Sweden since April. She explained that Mercedes renegotiated its dealer contracts to allow it to control the sales process, with retailers handling customer service and deliveries in exchange for a set fee.

The German manufacturer has a target of selling 25% of all its new cars online by 2025, up from less than 5% today. However, Seeger stressed that online sales will still require interaction with a dealer in at least 80% of cases.

“It wasn't easy," said Seeger in reference to the pilot scheme, "but as we look to integrate seamless retailing, we have to be in a position where we have one price across all our platforms, as we are not interested in driving margins down.

"To do that, we need to completely reorganise our model, and while our trial wasn't simple, it has shown that it can work for customers and retailers.

“Retailing is changing, and whatever we offer must be hassle-free. That might not be an easy point to reach, but our perspective is very much the future, and that means some difficult decisions that we must take now in order to be in a strong position. The model is different but still profitable for the dealers.”

Asked when the trial could be rolled out in other countries, Seeger would only say “we will see”, but she confirmed that it's a model Mercedes plans to pursue across all territories in the future.

What Car? Target Price data, which tracks a fair price to pay for a new car for consumers, reveals that some Mercedes models are currently available through retailers with some of the largest percentage discounts in the UK. What Car? also links buyers to retailers willing to sell cars at these reduced prices, underlining the veracity of the data.

The move towards setting pricing centrally and transitioning dealerships into centres for customer service, test drives and new car handovers mirrors an initiative currently being undertaken by the Volkswagen Group and being evaluated by other manufacturers.

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