Mercedes-Benz intends to follow Tesla, plans to shift to direct sales

Mercedes-Benz appears to be trying to replicate a similar business model successfully adopted by Tesla. The German luxury automaker is planning to shift to a direct to customer sales method instead of the conventional sales process the auto industry follows. The automaker is currently overhauling its sales network in Germany and in the rest of Europe as well, reports Auto News.

Mercedes-Benz Chief Financial Officer Harald Wilhelmn indicated that the automaker is aiming to be in closer proximity to the customer in order to have better control of the pricing of vehicles. For this, the car brand is moving from its current dealership model, said Wilhelmn. The automaker is reportedly cutting 15-20 per cent of its dealerships in Germany and around 10 per cent globally. This strategy comes as part of the plan to hit 25 per cent online sales by 2025. Also, the iconic luxury car brand is aiming to secure 80 per cent of European sales through its direct sales or agency model by 2025.

Mercedes-Benz Vice President of Communications and Marketing Bettina Fetzer has said that reduction of its German dealership footprint will take place by 2028 while cuts to its global footprint will take place by 2025. “We need fewer large showrooms in mature markets," Fetzer said. The report also claims that Mercedes-Benz is moving away from large showrooms in order to shit to the direct sales method. This strategy is claimed to give the auto company a competitive advantage.

Mercedes-Benz currently operates approximately 6,500 sales and service outlets around the world and around 1000 of them are located in Germany. As part of its new sales strategy of direct sales, the automaker is aiming to launch dedicated outlets for its different brands such as AMG, and Maybach. This strategy will see the automaker itself owning dealer stock and invoice the customers directly. Dealerships will be tasked with delivering vehicles and receive a commission on each model sold. Apart from that, the dealerships will also churn out revenue through aftersales services.