Mercedes-Benz Wants To Move To Direct Sales In Germany

Luxury / 14 Comments

Following success with the agency model in the UK, the luxury automaker will expand to its home market.

Mercedes-Benz has plans to start a direct-sales model in its home market of Germany, just weeks after implementing the new system in the key United Kingdom, reports Automotive News.

The automaker tested the idea in several regions, including Austria and South Africa, before implementing the direct sales concept in the UK. In 2021, Mercedes said it had come to an agreement with its European dealers that would see the company move to the new sales model.

At the time, the company's sales boss, Britta Seeger, said the luxury brand aimed to sell more than half its European inventory through the direct sales model by the end of this year.

The move is very important for the company's future, according to Mercedes CEO Ola Kallenius. "You turn yourself from a wholesaler into a retailer. It changes your whole attitude in how you run the business," he said.

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Tesla has long used the direct sales method in the United States, even though many dealerships and regulatory bodies are against it. That hasn't stopped Tesla from finding loopholes, though.

It's the customer that benefits most from the new model. Not only does the company (in this case, Mercedes) save money, but potential buyers don't have to worry about being taken advantage of. This would most likely eliminate the pesky practice of exorbitant dealer markups.

Retailers won't be left in the lurch, though. Under a direct sales model, they would act as an agent, serve the customer, and address any needs and concerns. Profits per vehicle sold may be reduced, but respective dealers wouldn't have to put up with other costs associated with running a traditional dealership.


"If a customer makes up their mind that they want to buy a Mercedes, normally they are shopping around at several dealers. You move away from selling the price to selling the car, which should be the case in the premium market," said Kallenius. This would make purchasing an EQS SUV, for example, a far more enjoyable experience than it currently is.

Sadly, there's very little chance the Stuttgart-based automaker would trial this system in the United States. The CEO said local franchise laws make a move to the direct sales model unlikely, but the company has reached another agreement with American dealers. Customers can now buy over-the-air updates directly from Mercedes, albeit "in partnership" with retailers.

Rival company BMW also believes the agency method is the way to go but, like Mercedes, has no plans to introduce this in the USA.


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