Mercedes-Benz Shifts Retail Structure to Direct-to-Customer Model
German luxury car maker Mercedes-Benz on Wednesday said it will move its retail structure in India to a “direct-to-customer model, under which it will hold the entire stock of new cars for sale. “.
This decision aims to improve the financial health of its partner dealers while offering customers a uniform and transparent price, a greater choice of vehicles and a transparent shopping experience.
The existing 125 dealers will operate as franchise partners of the company under the new structure called “Retail of the Future” (ROTF), which will begin in the fourth quarter of this year.
India is the third country after Sweden and South Africa where Mercedes-Benz adopts the new retail structure, where cars will be billed directly by Mercedes-Benz India (MB India) to customers and not by franchise partners.
“What is happening is that we are moving away from the traditional dealer model where MB India is the wholesaler, the dealers are the retailers and customers buy from the dealer at a price set by the dealer,” Martin said. , Managing Director and CEO of Mercedes-Benz India. Schwenk told PTI.
In the new ROTF, he said that MB India is the seller and the franchise partners will facilitate the sale of the cars on behalf of the company.
“The invoice the customer receives is from MB India with a price that MB India defines and sets,” he said, adding that this model had not been tested before in India and was also of a relatively new model in the world.
“Mercedes has only tested this model in a few countries – Sweden and South Africa, but it is not a mainstream model. So we are also going into new areas. We are in a very pioneering phase.” , said Schwenk.
When asked when the new retail structure would come into play, Schwenk said, “We will start in the fourth quarter of this year. We are expanding right now.”
Explaining how the new structure will benefit customers, he said they will have access to a larger pool for a selection of cars available from a centralized stock now held by MB India through franchise partners, the best prices directly from the company without having to negotiate, easier price comparison and full transparency.
For franchise partners, he said this gives them better financial health as they will not have any inventory on their books besides mitigating their financial and operational risks, resulting in a profitable and sustainable business model.
“Franchise partners continue to be representatives of the brand, maintaining their close relationships with customers and striving to provide the best customer experience in the market. It also allows Mercedes-Benz to remain customer-obsessed and remain a pioneering brand ready for the future, ahead of the curve, ”said Schwenk.
For the additional capital required for the new retail model, Schwenk said MB India will use part of the new capital injection from ₹1,750 crore he received from parent company Daimler AG in January of this year.
This story was posted from an agency feed with no text editing.
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