Mercedes-Benz has entered into a model agency agreement with its retailers that will lead to the introduction of the new UK retail framework from 2023.
The German premium brand, which had consulted with UK retailers on the change this summer, announced this afternoon (December 17) that it had agreed on key points of the process that would bring the model to the UK and its native Germany. in 2023.
The conditions have been agreed with the European Association of Mercedes-Benz Dealers (FEAC, European Federation of Mercedes-Benz Concessionaires) for a franchise framework which should see more than 50% of new Mercedes-Benz vehicles available in Europe sold. under the agency model by the end of 2023.
Mercedes has already rolled out its agency model with franchisees in Sweden, Austria, South Africa and India.
Britta Seeger, Member of the Board of Directors of Mercedes-Benz and Daimler Head of Sales, said: âOur concern is to make our customers even more loyal to our Mercedes-Benz brand around the world. Therefore, I am all the more happy that with this next step, together with the European Association of Dealers, we have now reached an important step for us and our partners in Europe.
âThe starting point for changing our sales model is changing the behavior of our customers in a digital world. “
At a Mercedes-Benz conference that AM attended in The Hague in 2019, the brand announced its intention to sell 25% of its vehicles online by 2025.
At the same event, the brand unveiled its plans to sell services, lifestyle products and experiences via its Mercedes Me application, demonstrating a desire to forge stronger direct links with its customers.
In today’s statement regarding the introduction of the agency model, Seeger said: âWe want to make it as easy as possible for our clients to interact with us. It doesn’t matter whether it’s digital or physical. The agency model helps us to network all touchpoints in a transparent way.
âWe have ambitious goals that we want to achieve with our business partners: by the end of 2023, more than 50% of new Mercedes-Benz vehicles available in Europe are expected to be sold under the agency model. “
FEAC President Friedrich Lixl said: âWith this agreement we create a clear and predictable framework for European sales and, together with the manufacturer, proactively deal with changing market conditions in order to continue to remain clear. ahead of the competition as well as securing investment and company value for agents in the future. “
Central role of “agents”
Mercedes said its vehicle sales “agents” will play a central role in building an omnichannel and transparent customer journey where freedom of choice is a central pillar, “from research to purchase through ‘upon delivery of the vehicle “.
He said additional benefits for customers included increased price transparency and an even wider online selection of vehicles.
“The new agency model gives partners the opportunity to focus even more than before on customers and their support,” said the Mercedes-Benz press release.
ICDP chief executive Steve Young told AM he understood Mercedes had listened carefully to its franchise retailers when developing its model agency plan for Europe.
He said: “I think you will find that there is a big difference between the agency model that you might see in Austria and the one that will come to the UK.”
Young said Mercedes’ rollout of its plans was made possible by a consolidated and heavily invested retailer network.
Equipment manufacturers “considering their options”
He added: âI don’t think it opens the floodgates, but there will be more. Stellantis that we know and VW have taken this route for BEVs. Others will consider their options.
In an exclusive interview with AM for the January edition of AM Magazine, Honda UK Managing Director Jean-Marc Streng said the Japanese brand was “exploring the possibilities” of the agency model.
However, he suggested that Honda would wait for the outcome of the review of the block exemption decision in May 2022, before drawing any conclusions.
Last month, the National Franchised Dealers Association (NFDA) raised concerns about the impact of the agency model and OEM direct sales in a consultation position paper and response to the Competition Authority. and contracts (CMA) on the âBlock exemption regulations for selected vertical agreementsâ.
He said: âThere is real scope for better regulation to promote fairer business practices between companies and greater competitive independence for the small parts of the supply chain that have traditionally been more vulnerable to damage. ‘application of subtle or indirect restrictions (economic as well as contractual) on their activities.