Mercedes-Benz has announced that it plans to reduce its dealerships by 10% worldwide, and up to 20% in the home market, Germany, by 2025, as it targets direct sales.
The prolific car manufacturer plan to hit 25 per cent online sales by 2025 as well as secure 80 per cent of European sales through its new direct sales model by 2025.
“We want to have more proximity to the customer and therefore have better control over pricing,” Mercedes chief financial officer Harald Wilhelm recently said.
“That’s why we are moving from the current dealer role.”
Mercedes-Benz currently has approximately 6,500 Mercedes and Smart sales and service outlets worldwide, and roughly 1,000 dealerships in Germany.
According to Bettina Fetzer, Vice president of communications and marketing, cuts to its global dealership will take place by 2025 while cuts in the German market will take place by 2028.
“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.”
Through its ‘agency direct sales‘, the carmaker owns the stock and invoices the customers directly. Dealerships, who are tasked with delivering vehicles to the customers, can also make money through after-sales services.
Dealerships, who are tasked with delivering vehicles to customers, also make money through after-sales.