PREMIUM car maker Mercedes-Benz is to end the retailer’s ability to negotiate a discount with the introduction of an agency model, slated for 2023.
It follows agreement with the European Association of Mercedes-Benz Dealers to go ahead with the agency model, which has already been introduced in Sweden, Austria, South Africa and India.
The agency model will be launched in Mercedes’ domestic market Germany in 2023 at the same time as the UK.
Mercedes says it allows customers to choose whichever channel they feel is appropriate – digital or physical – and provides greater price transparency and an even greater online selection of vehicles.
Announcing the agreement, Britta Seeger (pictured), who is a member of the board of management of Daimler AG and Mercedes-Benz AG, responsible for sales, said:
The starting point for changing our sales model is the changed behavior of our customers in a digital world. We want to make it as easy as possible for our customers to interact with us. It doesn’t matter if it’s digital or physical. The agency model supports us in seamlessly networking all contact points. We have ambitious goals we want to achieve together with our sales partners: by the end of 2023 more than 50% of new Mercedes-Benz vehicles available in Europe should be sold under the agency model.
Changing to an agency model is likely to have a significant impact on the volume of Mercedes’ models transacted by leasing brokers, although Mercedes volume has been restricted during the semiconductor shortage.
Audi, which also moved to an agency model in 2018, has seen its dominance in the market decline as a result with dealers now only paid a handling fee.
Commenting on the changes, Lee Jones, managing director of FleetProcure the broker/dealer vehicle purchasing system, said:
The agency model both can and cannot work in the leasing broker market. Those OEMs that are successful in the channel are those that implement leasing broker specific programmes. Two ends of the spectrum demonstrating this are Audi, which did not and has therefore seen volumes in the sector drop dramatically, then there’s BMW which did engage and has seen strong results via controlled programmes for the sector.
Ralph Morton is the leading journalist in the leasing broker sector and editor of Broker News, the website which provides information and news for BVRLA-registered leasing brokers. He also writes extensively on the fleet and leasing market in both the UK and Europe.