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Mercedes-Benz announces new vehicle retail strategy in India

Mercedes Benz said that the customer-oriented and futuristic retail strategy promises to be a beneficial proposition for the customers, dealers and the brand, with the advent of digitization and changing dynamics of retail business the world over. (Pradeep Gaur/Mint)Premium
Mercedes Benz said that the customer-oriented and futuristic retail strategy promises to be a beneficial proposition for the customers, dealers and the brand, with the advent of digitization and changing dynamics of retail business the world over. (Pradeep Gaur/Mint)

  • Named 'Retail of The Future', the strategy involves owning the entire vehicle inventory instead of pushing most of it to dealers

NEW DELHI : Mercedes-Benz India Pvt. Ltd, the country’s largest luxury vehicle manufacturer, on Wednesday announced major changes in its vehicle retail strategy. The company now will own the entire vehicle inventory instead of pushing most of it to its dealers. It will also bill customers directly instead of through dealers, and has termed the new strategy as "Retail of The Future".

With prolonged slowdown in the Indian automobile sector due to economic slowdown made worse by the covid-19 pandemic, auto companies are now taking steps to improve the financial health of its dealers and to ease the pressure on these entities.

Also, in the aftermath of the covid-19 outbreak, physical visits by customers at dealerships, for vehicle purchase inquiry, are likely to take a hit and companies are preparing to directly approach and service them through digital platforms.

“According to this new business model, Mercedes-Benz India will own the entire stock of cars, sell them via appointed franchise partners, invoice the new cars to the customers directly, process the order and fulfil them, offering one transparent price and purchasing experience for customers," the company said in a statement.

It further stated that the primary roles and responsibilities of the Mercedes-Benz franchise partners (dealers) will include establishing and maintaining of customer contacts, development of the market, and facilitating the sale of its cars.

The company also mentioned that the customer-oriented and futuristic model promises to be a beneficial proposition for the customers, dealers and the brand, with the advent of digitization and changing dynamics of retail business the world over.

According to Martin Schwenk, managing director and chief executive, Mercedes-Benz India, this long-term strategic move will strengthen the company’s customer focus by introducing a fundamental transition in the retail business in the market. It will also deliver a win-win solution for both customers and dealers, underscoring the clear vision for a future which is sustainable, empowering and digital.

“We are also glad to have the collaboration of our franchise partners in this transition, further empowering them to have significantly less financial and operational risks, resulting in a profitable and sustainable business model. The franchise partners continue as brand representatives, maintaining their strong connect with the customers and striving to offer the best customer experience in the market," said Schwenk.

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