Mercedes-Benz plans to shrink its worldwide seller community over the approaching years, with many of the cuts to happen within the automaker’s house market of Germany.
In an interview with Automotive Information (subscription required) revealed on Monday, Bettina Fetzer, Mercedes’ vice chairman communications and advertising, mentioned the cuts can be accomplished by 2025 for many markets. She mentioned cuts in Germany will run by way of 2028 and canopy between 15 and 20% of the dealerships there.
Mercedes has round 1,000 dealerships in Germany overlaying each the Mercedes and Good manufacturers, versus about 6,500 for the remainder of the world. It is not clear if any cuts are deliberate within the U.S., the place most dealerships are franchise owned.
On the identical time, Mercedes will proceed so as to add dealerships in its much less mature markets, resembling China. It should additionally transfer to determine smaller, boutique-style shops for its AMG and Maybach sub-brands, Fetzer mentioned. The transfer is a part of Mercedes’ just lately introduced technique to concentrate on high-margin, low-volume autos.
Mercedes additionally needs to maneuver to a direct gross sales mannequin, the place sellers promote inventory owned by the automaker, receiving a fee in return. This fashion the automaker units the ultimate worth and immediately invoices the shopper. Mercedes needs this mannequin to cowl 80% of its gross sales in Europe by 2025. The automaker can also be concentrating on on-line gross sales of round 25% by the identical date.
“We need to have extra proximity to the shopper and subsequently have higher management over pricing,” Harald Wilhelm, Mercedes’ chief monetary officer, mentioned final week throughout an investor presentation, in response to Automotive Information.
Cadillac just lately made strikes to scale back its seller community within the U.S. by greater than a 3rd by providing money incentives to dealerships that select to shut down. Nevertheless, even with the cuts, Cadillac’s seller community with roughly 560 dealerships remaining remains to be larger than rivals regardless of the model having fewer gross sales.