Mercedes-Benz To Axe 10% Dealerships Globally By 2025 As Focus Shifts To Direct Selling: Report

Mercedes-Benz is focusing to increase the number of direct sales to customers across the globe. According to a recent report by Automotive News Europe, the company is reportedly planning to implement its direct-to-customer retail strategy in 15 global markets by 2025. The report says that around 80 per cent of the company's volume achieved in Europe could come from direct sales by 2025. If that happens, we will see a 10 per cent reduction in the company's global dealer network by the middle of this decade, and in Germany alone there will be 20 per cent fewer traditional showrooms.

Mercedes estimates online sales will gain traction in the years to come, so much so that by 2025, one in four buyers will purchase their next car online.

Now, this is not exactly a new concept. American electric car maker, Tesla has been direct selling to customers across the globe and several other brands are adopting this strategy. However, among mainstem premium/luxury carmakers Mercedes-Benz has been one of the first brands to adopt it. Right now, there are about five markets where Mercedes-Benz sells its cars directly to customers via online channels, and India is one of them. The company's Indian arm introduced its direct retail strategy dubbed as 'Retail of the Future' in October 2021, and since then, it has sold over 11,000 vehicles through direct selling.

Also Read: Mercedes Says Over 11,000 Cars Sold Through Retail Of The Future

Right now, there are about five markets where Mercedes-Benz sells its cars directly to customers via online channels, and India is one of them

Now, this model is proven to be more beneficial for the company globally as it enables Mercedes-Benz to not only have more control but also reduce distribution costs. Automotive News Europe says that according to Bettina Fetzer, Daimler AG, Head of Global Communications Mercedes-Benz Cars, the company needs fewer big dealerships in mature markets. Fetzer says that "customers are getting younger, wealthier, and more digital." Consequently, they are more willing to shop online instead of heading to one of the 6,500 dealers around the world. In Germany alone, the company has around 1,000 outlets. Mercedes estimates online sales will gain traction in the years to come, so much so that by 2025, one in four buyers will purchase their next car.

Also Read: Mercedes-Benz C-Class Review

Mercedes-Benz is pushing further into the luxury territory by preparing a Maybach SL, an electric G-Class, and a Mythos lineup of ultra-limited special cars

Having said that, the company is expanding its sales network in China by adding new outlets, and it is also looking at having dedicated AMG, Maybach, and G-Class showrooms. As part of its growth strategy, the carmaker aims also aims to focus on its more premium products rather than the compact and entry-level cars. In fact, the company has decided to invest more than 75 per cent in vehicles from the C-Class segment above. Additionally, the company is pushing further into the luxury territory by preparing a Maybach SL, an electric G-Class, and a Mythos lineup of ultra-limited special cars.

Source: Automotive New Europe via Motor1