Mercedes-Benz 'S New Sales Strategy: End Times For Car Dealerships?

For the exclusive use of N. Mansour, 2024.
W28408
MERCEDES-BENZ’S NEW SALES STRATEGY: END TIMES FOR CAR

DEALERSHIPS?
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It was late afternoon on Tuesday, December 7, 2021. Belinda Oliveri, managing director of Mercedes-Benz
Starlight (MB Starlight), leaned back in her chair as she reflected on the events of the past couple years.
She recalled a news article from December 5, 2019. “Mercedes’ New Sales Loophole to Prevent Dealer
‘Rip-Offs,’” the headline read.1 The all-new Mercedes-Benz EQC electric SUV was coming to Australia.2
At an earlier meeting of the company’s fifty-two Australian dealers,3 Mercedes-Benz had announced that
coinciding with the launch, it would roll out its pilot of a new sales model through which customers could
buy the EQC at a fixed price directly from Mercedes-Benz and only step inside a dealership to collect the
vehicle. Within six months of the pilot commencing, Mercedes-Benz announced that it would completely
switch to this agency model of selling cars in Australia as of January 2022. Oliveri knew that as a respected
industry leader and significant player in Australia’s high-volume, multi-brand automotive business
landscape, she had to develop an informed opinion on this matter. “These are interesting times,” she
ruminated. “The automotive industry is undergoing significant transition. Driven by technology, disruptive
forces are taking hold at multiple levels. The implications of this for manufacturers, distributors, retailers,
and consumers is dramatic and profoundly interesting.” Oliveri knew that change was coming. But there
were a lot of questions: Why was Mercedes doing this? Would the change be good for the company? Would
it be good for the customer? And finally, should she support the move or oppose it by joining the A$650
million4 lawsuit that 80 per cent of dealerships had filed against Mercedes-Benz Australia/Pacific Pty Ltd
(Mercedes-Benz Australia/Pacific)?5
MERCEDES-BENZ IN AUSTRALIA
Mercedes-Benz was launched in Australia on July 30, 1958, with the creation of Mercedes-Benz Australia
as a joint venture between Germany’s hugely successful Daimler Benz AG and Australia’s Standard Motor
Products (Standard), which later changed its name to Australian Motor Industries. From humble beginnings,
the luxury brand grew to become the tenth-largest car brand in Australia, selling 38,604 new cars and
commercial vehicles in 2019.6 This was no small feat given that Australia was one of the world’s largest
new-car markets per capita, second only to the United States.7 For the first half of 2021, Mercedes-Benz
continued to dominate the Australian luxury car market with sales of 16,141 cars ahead of luxury rivals
This document is authorized for use only by Nadia Mansour in COMM 442-MARKETING STRATEGY taught by Wootae Chun, University of Northern British Columbia from Jan 2024 to Jul
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Bayerische Motoren Werke AG (BMW; 14,108 cars), Audi (9,013 cars), AB Volvo (Volvo; 5,439 cars),
and Lexus (5,392 cars).8
The company initially imported fully assembled vehicles from Germany but quickly realized that assembling
them in Australia and selling them through Standard’s wholesale and retail operations was more effective.
The first Australian-built Mercedes, a 220S Sedan, rolled off the assembly line on February 12, 1959.9
The 1960s brought hard financial times, and Daimler-Benz took full control of Mercedes-Benz Australia,
stopping local car assembly and reverting to full imports. Ten Mercedes-Benz distributors were selected,
and the first two flagship city stores were opened by Lane Motors in Melbourne (December 1961) and York
Motors in Sydney (December 1962). By 1969, the company had also established a national parts warehouse,
service workshop, engineering school, and office buildings in Melbourne.10
In the 1970s, Mercedes-Benz Australia aggressively expanded its national dealer and service network and
achieved great success in selling commercial vehicles. Simultaneously, the company turned its attention to
improving media relations and building the brand. To celebrate the fiftieth anniversary of the first
Australian Grand Prix, it brought world champion Jean Manuel Fangio to Australia, drawing huge public
attention by leveraging the brand’s fantastic racing history.11
Throughout the 1980s and 1990s, Mercedes-Benz Australia continued to build the luxury brand in the
country and was powered by motoring awards, technological innovation, and a deep commitment to
customer service. In 1997, Mercedes-Benz Australia changed its name to Daimler-Benz Australia/Pacific
and opened a new A$8 million headquarters in Melbourne. This was not long before the bombshell A$43
billion global merger with US carmaker Chrysler was announced, making DaimlerChrysler the world’s
fifth-largest automotive company.12
The 2000s saw the Mercedes-Benz brand continue to grow in Australia despite the global unravelling of the
merger with Chrysler and the renaming of the company to Daimler AG in order to make a clear distinction
between the company brand Daimler and the group’s various brands (including Mercedes-Benz Cars &
Vans).13 The Australian subsidiary was renamed Mercedes-Benz Australia/Pacific. The Mercedes C-Class
won the 2007 Wheels Car of the Year award and further entrenched the brand as a key player in the Australian
automotive landscape. That growth continued unabated. With a slew of new models, including the entry level
A-Class hatch and sedan, Mercedes-Benz Australia/Pacific powered forward over the next decade, becoming
the most popular premium car brand in Australia in 2020 with 29,455 new vehicle sales.14
STRUCTURE AND STRATEGY
Structurally, Daimler AG was the parent company and Mercedes-Benz Australia/Pacific the importer and
wholesaler for the Mercedes-Benz range of passenger cars and commercial vehicles.15 Like every other
automotive company in Australia, Mercedes-Benz Australia/Pacific used the traditional dealership model
to sell cars. The model involved official franchisee dealers buying automobiles from the company at
wholesale price and reselling them to customers at a transaction price negotiated by their trained
salespeople. This allowed individual dealers to determine what margin they made from a sale. Dealerships
used this flexibility to provide competitive offers against competing brands. In addition, these authorized
dealerships provided a range of value-added services, including trade-ins, new-car options, financial and
insurance products, and after-sales parts and service. Most importantly, dealerships physically represented
the brand at the consumer interface. In a showroom, new and used cars were displayed in a bespoke brand
format consistent with the Mercedes-Benz philosophy and approved by Mercedes-Benz Australia/Pacific.
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Quality, trained sales and service personnel provided customer service in line with the brand’s premium
positioning and service standards. As of January 2020, Mercedes-Benz Australia/Pacific had fifty-two
authorized dealers across the country.16
Meanwhile, Daimler AG, the holding company, had serious global ambitions for Mercedes-Benz. On
October 6, 2020, Ola Källenius, chairman of the Board of Management of Daimler AG and Mercedes-Benz
AG, announced a new strategic course: “Our strategy is designed to avoid non-core activities to focus on
winning where it matters: dedicated electric vehicles and proprietary car software. We will take action on
structural costs, target strong and sustained profitability. With this new strategy we are announcing our
clear commitment to the full electrification of our product portfolio and our determination to ensure the
business is fully carbon-neutral, in line with our Ambition 2039 target.”17
The Mercedes-Benz strategy was built on six key pillars: think and act like a luxury brand, focus on
profitable growth, expand customer base by growing sub brands, embrace customers and grow recurrent
revenues, lead in electric drive and car software, and lower the cost base and improve the industrial
footprint.18 At the core of this strategy was the intent to transform the company into the world’s number
one leader in electric mobility.
Even before this strategy was presented to the world, Mercedes-Benz Australia/Pacific had announced the
launch of the EQC, the first fully electric luxury SUV in Australia. At the same time, they announced the
pilot of their direct-to-customer sales model.19 The only way customers could buy the EQC was directly
from the manufacturer online.
THE MERCEDES-BENZ CUSTOMER
Since 1886, Mercedes-Benz had been a pioneer across the globe and was known for its quality, engineering,
and innovation. Gottlieb Daimler invented the high-speed engine, and independent of him, Karl Benz
invented the automobile itself (the Benz Patent Motorwagen). Beyond the internal combustion engine,
Mercedes-Benz’s innovation portfolio included the drop chassis, the diesel-powered engine, direct fuel
injection, anti-lock braking systems, airbags, the electronic stability program, and active lane-keeping assist
enhancement, to name a few. This storied history was a key part of the experience the company offered. Its
engineering excellence was what had always attracted customers and kept them coming back. But the
company’s extraordinary marketing and commitment to customer service were the most pivotal factors in
making Mercedes one of the most iconic brands in the world.20
Sam Smith, dealer principal of MB Starlight, had a deep understanding of the Mercedes-Benz customer. He
pointed out that they “are astute and have generally worked very hard to reach a stage in their lives where they
can consider a prestige brand. Because of this, they tend to be very business minded and like to know details
about the vehicle, price, and finance. They also want to enjoy the entire purchase experience and insist that
all promises are met or exceeded. I think there is very little room for error with a Mercedes-Benz customer.”
Francis Dyksterhuis, business manager at MB Starlight, explained that “anyone could be a Mercedes
customer. We have customers who have been brand loyalists for life. They come from a Mercedes family
or as a child dreamt of one day owning a Mercedes-Benz. These customers may have had Mercedes cars
for the last twenty or thirty years. On the other hand, you have customers who can finally afford one and
tick it off their bucket list. And then there are surprise customers. Often, these people don’t even know that
they are (or could be) Mercedes customers. With the large model range, the Mercedes-Benz is more
accessible now than it has ever been. Even people in their early twenties can jump inside a Mercedes-Benz.
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They think they cannot even afford one, but when they do the numbers, they realize they could actually get
one. We do not only recycle the same customers, we are gaining new customers.”
MB Starlight Corporate Sales Manager Larissa Liu added that “Mercedes-Benz is a fantastic product, but this
is a people business. When someone walks into our dealership, we need to understand their needs and give
them what they want. We have to understand their triggers and motives. Some customers come with weeks
and weeks of proper research. They know exactly what they want. They are very analytical, and we have to
tick all their boxes to get them to commit to buying a car. Other customers come in for a quick service and
upgrade to a new model. Or customers come just to have a look, and half an hour later, they have bought a
new Mercedes. For the sales process, you don’t know when it starts and how it ends. People may ring the
dealership or explore online and fill out a form. They may be referred by someone, perhaps a family member,
or simply walk in. Sometimes, they are just driving past, and they stop by. Sometimes when it is pouring rain
outside, they may come into the dealership just for cover—and they end up buying a car!”
Mercedes-Benz has always been at the vanguard of technology, but at the same time, the customer has been
at the heart of several of the company’s customer care and customer-focused innovations. In 2014, at the
84th International Motor Show in Geneva, Mercedes-Benz presented its new Mercedes me service brand.
Under this banner, Mercedes bundled all existing and future service offers, making them digitally
accessible. In June 2015, Mercedes-Benz became one of the first automobile makers to offer smartphone
connectivity.21 The Mercedes me connect services were available free of charge for a period of time (three
years in Australia) and could be extended via subscription. Mercedes me was a digital ecosystem that
allowed all service and mobility areas to be seamlessly and conveniently integrated within the brand
network, further raising the bar for individualized customer care.22
THE CUSTOMER JOURNEY AND THE DEALERSHIP
Traditionally, the act of buying a Mercedes-Benz concluded at a dealership. It would not matter where an
enquiry originated: whether that was over the phone, online, via advertising, via a walk-in, or via a casual
test drive. Whatever the starting point of the customer journey, the typical closing occurred at an authorized
dealership—and dealerships excelled at this. They presented new and used Mercedes-Benz cars in a
luxurious environment complete with plush lounges, meeting rooms, and a cafe that served free gourmet
coffee and snacks. From the moment a customer walked in, a skilled sales and customer service team would
engage in value-addition activities—customizing customer interaction in real time—to positively support
the customer decision.
Smith of MB Starlight led a team with an obsessive commitment to the customer experience. “The customer
experience is so important,” he said. “A guest must be attended to immediately, with ample time spent
showcasing the product and facilitating a great test drive. The finer details are also extremely important—
coffee, sparkling mineral water, and no wait times are a must. The delivery handover experience also needs
to be exceptional, as this confirms to them that they have purchased a prestige brand. A Mercedes-Benz
guest enjoys spending time at the dealership so long as they are feeling valued and special. If a substandard
customer service experience occurs, it is less likely a second chance will be offered.”
From extolling the virtues of the brand heritage to focusing on value for money to responding to endless
customer questions, the sales team were adept at effortlessly switching from a lifestyle focus, to a
transactional poise, to an informational posture; it all depended on the perceived needs of the customer.
This also presented abundant up-selling (e.g., body kit upgrades, optional extras) and cross-selling (e.g.,
window tinting, paint protection) opportunities. Once the customer was inside the dealership, the team could
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effortlessly move them from sales to optional extras and from trading in their existing car to considering
accessories and financing—an agility that created a closed loop of value creation and capture. “Our sales
team play a significant role, as do many other team members that interact with our guests during the
customers experience,” Smith said. “The in-house dealership experience cements trust in the brand and the
product. Without the five-star presence of the dealership facility, staff, and exceptional customer orientated
approach, sales would be far less.”
The dealership was also the central hub of customer-relationship management. From capturing data on
customers who had expressed a passing interest in a Mercedes to celebrating the delivery of a new car in
fun and exciting ways (e.g., gift wrapping it, displaying the names of the new owners at the dealership, a
dedicated delivery team setting up and explaining the features) and maintaining and servicing their
Mercedes-Benz, the dealerships engaged with customers whether they were potential, new, or existing.
And then there was customer-grievance handling and management. “There is a very important relationship
of trust between the customer and senior management at a dealership,” explained Smith. “Whenever the
customer needs to escalate a concern and seek the assistance of management, not only do we rapidly
endeavour to correct their immediate issue but demonstrate that, as a dealership, we care. This creates a
virtuous cycle of trust as the customer experiences our commitment to customer service and the efforts we
make to remedy a situation.”
THE NEW SALES STRATEGY
In December 2019, Mercedes-Benz Australia/Pacific introduced a pilot of its new sales strategy at a national
meeting of Mercedes-Benz dealers. Under the agency model, the company would own and control the stock
of EQCs instead of selling to dealerships. These would then be sold for a fixed price across Australia. For
the pilot, nine dealerships were selected to deliver the car to customers. Mercedes-Benz Australia/Pacific
would invoice customers directly, and there would be no negotiation or haggling over price. Customers
could also order their EQC online, only going to the dealership to collect it.23
Speaking about the strategy, Horst von Sanden, CEO of Mercedes-Benz Australia/Pacific, said, “Really,
our intention is to cater to people who don’t need to, or don’t want to, or are sick and tired of going to a
dealership. The biggest frustration for customers is if they haggle and then they go to a barbecue on
Saturday, and someone got a better deal. They hate the retailer for it because ‘this bloke has ripped me off.’
. . . [Fixed prices] are more transparent, more honest.” Director of Customer Management Jason Nomikos
added that “It’s not often a pleasant experience for many, if not most, customers. Not everyone feels
comfortable during the negotiation.”24
James Voortman, CEO of the Australian Automotive Dealer Association, the leading industry body
representing franchised new-car dealers, called these comments disappointing and a “kick in the guts” to
the dealer network.25 He pointed to a recent Roy Morgan report indicating an industry-leading customer
satisfaction rate of 93 per cent, and he said the dealer network had “worked very hard to serve these
customers and invested significant time, effort and capital in the brand.”26 Smith argued that contrary to
what the Mercedes-Benz Australia/Pacific executives were saying, some customers actually loved the thrill
of negotiation and saw haggling as a sport that enhanced their purchase experience. He further pointed out
that if every individual dealer had to set a fixed price for every model in their showrooms, the Australian
Competition and Consumer Commission would have deemed the practice anti-competitive and illegal. But
if Mercedes-Benz Australia/Pacific appointed dealers as selling agents and retained ownership of the stock,
they could fix prices across the entire network of showrooms, potentially delivering higher retail prices and
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retaining some of the dealer profits. Dealers contended that given the profile and dominance of Mercedes-
Benz in the luxury car segment, this new sales strategy would reduce price competition, leading to the
customer eventually paying higher prices. Voortman put it this way: “If there’s a fixed [cost] and there’s
no intra-brand competition, what’s the incentive to lower prices?”27
The dealer network overwhelmingly rejected the new sales strategy, with only three of forty-nine dealers
voting in favour.28
THE WAY OF THE FUTURE?
Interestingly, Mercedes was not the first automotive company to do this in Australia. Tesla, Inc. launched
in Australia using a fixed-price model. With just a handful of brick-and-mortar dealerships (called Tesla
Stores) largely to facilitate test drives and occasional service requirements, customers could only buy their
cars online. The brand had one price available and permitted no bargaining. Polestar (Volvo’s electric car
brand) had already announced its plans to use shopping centres and other spaces to promote its models.
However, customers would have to make their purchase directly from Polestar’s website.29
On July 1, 2021, Honda Motor Company (Honda) switched to fixed prices for all its cars at all its Australian
dealerships.30 Honda argued that deals, discounts, special offers or month-end sales all resulted in lowering
resale values of their vehicles. Even the purchase price of a new car differed nationally depending on the
individual dealer and customer. The argument from Honda, as reported in peak industry news outlet
GoAutoNews Premium, was that “if one buyer received a 5 per cent discount and another a 15 per cent
discount, the first buyer’s car would have depreciated by an extra 10 per cent. Under a fixed-price model,
the only factors affecting the resale value of a car would be age, mileage, and condition. This was designed
to make Honda vehicles depreciate slower than those of rival brands. According to the company, even
dealers would be better off under the new model because of lower operating costs due to not having to
grapple with holding poorly selling inventory. Under the agency system, dealers could sell any vehicle on
order nationally, not just the ones allocated to them, and have access to the full Honda range without
incurring floorplan costs.”31
“I think there’s a lot of misinformation going around,” Director of Honda Australia Stephen Collins told
Wheels magazine. “We’ve still got showrooms, we’ve still got service facilities, we’ve still got test-drive cars,
we’ve still got people in the dealerships doing a great job. The whole human element is just massively
important, whether it’s agency or franchise. We’re not selling every car online—all that sort of rubbish is just
not true.” He did, however, acknowledge that for some customers, “it’s in their DNA to haggle,” and the new
model “won’t appeal to them.”32 According to the Federal Chamber of Automotive Industries, in the July
2021–September 2021 quarter, Honda Australia reported a 49.8 per cent decline in sales compared to the same
period the previous year—and that was in the context of a 26.9 per cent increase in new car sales over same
period the previous year.33 Honda’s share of the Australian automotive market dropped to 1 per cent, a far cry
from its twenty-year average of 3 per cent to 4 per cent. Honda called these numbers “premature.”34
The Australian new car market was fiercely competitive and was forecast to grow at a compound annual
rate of 1.5 per cent over the five years through 2026.35 Not all automakers were convinced that this new
model was the way of the future. As brands continued to experiment with the agency model and fixed
prices, a special investigation by Drive found that the top twelve mainstream brands in Australia (Toyota,
Mazda, Hyundai, Kia, Ford, Mitsubishi, MG, Volkswagen, Suzuki, and Isuzu) had ruled it out.36 Even more
interesting was the approach taken by Mercedes-Benz Australia/Pacific’s biggest direct competitor in
Australia: BMW. In an interview published on the company’s global website, Pieter Nota, member of
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BMW’s Board of Management, Customer, Brands, and Sales, noted that at the height of the pandemic, the
company “enabled sales representatives at our retail partners in more than 60 markets to advise customers
and sell vehicles without restrictions, from any location. So, for example, they can configure a customer’s
ideal car together with them on the phone using a shared screen or even give them a live tour of the cars
they have in stock.”37 He went on to say that “online sales is an important aspect of our new strategy, of
course, but our new sales concept goes much further than that. We have stated our aim of offering the
industry’s best premium customer experience in close collaboration with our retail partners. We want to
differentiate ourselves from the competition in this way.”38
Undeterred, Britta Seeger, worldwide head of marketing and sales for Mercedes-Benz Cars & Vans and
member of the Daimler AG’s Board of Management, announced in mid-2020 that beyond the EQC pilot,
the company would completely switch to the agency model of selling cares in Australia in 2022, calling it,
“the future model for doing business.” Speaking to a roundtable of international press, she pointed out that
it was incorrect to assume that dealers were being removed from the sales and marketing of new cars. The
company still expected them to interact with customers in about 80 per cent of sales and service cases. “We
want the customer to decide what they need to do and how much they want from their dealer. The customer
has to be allowed to choose what they want.” Speaking about the importance of dealers, she said, “Dealers
have a new role and if you compare with five years ago, the customer was visiting the dealer up to eight
times before buying a car. Today, around the globe, because of digital, the visits are one or two times, if at
all. Obviously, we discuss what this means going forward and then we are prepared for the new way of
customers buying a car.” She identified COVID-19 as having accelerated digitization and the adoption of
the agency model. However, according to her, dealers did not “have to change.” They were still the brand
ambassadors and remained very important to the Mercedes-Benz Australia/Pacific business case in the
country. “We don’t want to lose any long-term dealer. I want to do this transition with the dealers.”39
Doubling down on the strategy, Mercedes-Benz announced that the agency sales model had been first
piloted and then adopted in Sweden, Austria, and South Africa. In the last quarter of 2021, the company
rolled it out in India and followed it up by announcing that its home market, Germany, and its fourth-largest
market, the United Kingdom, would be next.40 By 2025, Mercedes-Benz expected 25 per cent of its
worldwide sales to be under the agency model.41
THE A$650 MILLION PROBLEM
Dealers in Australia remained unconvinced. With the new agency model scheduled to commence on
January 1, 2022, Mercedes-Benz Australia/Pacific was under intense scrutiny and pressure. Forty of its
fifty-two dealers had taken the company to court, alleging that they had been forced to accept the changes
against their will and claiming damages of A$650 million under the Competition and Consumer Act and
Australian Consumer law. In a filing with the Victorian Federal Court, dealers argued that they were strong
armed into non-renewable agreements that had decimated the value of their dealerships.42
Speaking to the Australian Financial Review, Australian Automotive Dealer Association CEO Voortman
explained it like this: “The Mercedes-Benz network has been developed off hundreds of millions of dollars
of investment by dealers. This case is relevant to every other dealer in Australia because if Mercedes can
expropriate goodwill at no cost, then no dealer is safe. That’s why they’ve come together in such
unprecedented numbers.”43 Legal documents cited by the Australian Financial Review showed that
Mercedes-Benz Germany told dealers in February 2020 that they would be required to become agents of
Mercedes-Benz Germany instead of remaining independent retail operations. They would receive a fixed
commission on car sales at fixed prices, but Mercedes-Benz Germany would directly own and control all
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customer relationships. Dealers were advised that if they did not sign these new agreements by September
2021, they would stop receiving Mercedes-Benz vehicles to sell. There was also an offer of a limited safety
net for two years of lost profits, but the new agreements were four-year terms with no right of renewal.44
As Richard Dudley, CEO of the Motor Trades Association of Australia, pointed out, “it’s not so much the
introduction of another business model. It’s how you choose to introduce that business model, how it impacts
and what you’re required to do under the relationship you’ve had, in many instances for up to 50 years.”45
On the other hand, Tony Weber, CEO of the Federal Chamber of Automotive Industries, which represented
99 per cent of car brands in Australia, said that “innovation and competition are kings across the retail
landscape. Despite this, some car dealers want to immune themselves from change, even when customers
are crying out for new ways to do business.” The chamber’s 2019 pre-COVID-19 data showed that new car
sales only contributed 4 per cent of dealers’ profits. Used cars made up 8 per cent, financial and insurance
services up to 20 per cent, parts 22 per cent, and servicing 45 per cent, making the latter the most lucrative
part of the dealership business.46
OLIVERI’S DILEMMA
As managing director of MB Starlight, Oliveri was a person of influence within the Mercedes-Benz
Australia/Pacific dealer network. MB Starlight was established in the 1990s. Under Oliveri’s stewardship,
the group had grown to become one of Australia’s more successful automotive dealerships. Oliveri knew
that as a significant player in Australia’s high-volume, multi-brand automotive business landscape, she had
to form an informed opinion on this matter. She also knew that change was inevitable. Regardless of how
she personally felt about it, Mercedes-Benz was going ahead with the agency model in Australia. But was
this the right move for the company? And what would it mean for the customer? Would it be good or bad?
Finally, should she join the court action to seek compensation? Or should she go along for the proverbial
ride and see how things played out?
At the back of her mind was the recent consumer research by the Australian Automotive Dealer
Association presented in The Australian: “94% of surveyed potential car buyers value the ability to
negotiate a price when buying a vehicle. However, 33% of respondents found the fixed price model
appealing; 31% found it unappealing and 36% were neutral. More than 50% believed that the fixed price
model would make cars more expensive.”47
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ENDNOTES
1
David McCowen, “Mercedes’ New Sales Loophole to Prevent Dealer ‘Rip-Offs,’” Weekly Times, December 25, 2019,
www.weeklytimesnow.com.au/machine/motoring/mercedes-new-sales-loophole-to-prevent-dealer-ripoffs/news-
story/b917e7e03488fe538ae32393b505d9de.
2
Mercedes-Benz, “Electric Now Has a Mercedes: The All-New EQC | Trailer,” YouTube, video, March 10, 2020, 1:57,
https://www.youtube.com/watch?v=UhMZ5X01vzg.
3
Lachlan Moffet Gray, “Mercedes-Benz Dealers Consider Legal Action over Corporate Move to Fixed-Price Agency Model,”
The Australian Business Review, September 24, 2021, https://www.theaustralian.com.au/business/mercedesbenz-dealers-
consider-legal-action-over-corporate-move-to-fixedprice-agency-model/news-story/9c7835894f49399f5e2006ee7327ac1c.
4
A$ 1 was equal to US$ 0.7136567254 on December 21, 2021.
5
Sier, “Judge Tells Mercedes-Benz It ‘Can’t Have Its Cake and Eat It’, in $650m Legal Battle”, Australian Financial Review,
November 12, 2021, https://www.afr.com/technology/650m-dealer-lawsuit-against-mercedes-benz-kicks-off-with-urgency-
20211112-p598eq.
6
Mike Costello, “VFACTS: 2019 New Car Sales Results,” Drive, January 6, 2020, www.caradvice.com.au/817278/vfacts-
2019-new-car-sales-results/.
7
Andrew Chesterton, “Australian Car Market: Car Sales, Statistics and Figures,” Carsguide, August 3, 2022,
https://www.carsguide.com.au/car-advice/australian-car-market-car-sales-statistics-and-figures-70982.
8
Scott Collie, “Mercedes-Benz Leading the 2021 Luxury Sales Race,” CarExpert, July 8, 2021,
https://www.carexpert.com.au/car-news/mercedes-benz-leading-the-2021-luxury-sales-race.
9
Alborz Fallah, “Mercedes-Benz Celebrates 50 Years in Australia,” Drive, August 5, 2008,
https://www.drive.com.au/news/mercedes-benz-celebrates-50-years-in-australia/.
10
Fallah, “50 Years.”
11
12
13
“1995 – 2007. ‘World Corp.’ Vision,” Mercedes-Benz Group, accessed December 2, 2021,
https://www.daimler.com/company/tradition/company-history/1995-2007.html.
14
Tung Nguyen, “Mercedes-Benz Officially a Top 10 Car Brand, but BMW and Audi Are Closing the Gap as 2020 New-Car
Sales Data Shows,” Carsguide, January 6, 2021, https://www.carsguide.com.au/car-news/mercedes-benz-officially-a-top-10-
car-brand-but-bmw-and-audi-are-closing-the-gap-as-2020.
15
16
Damion Smy, “Is the Agency Model Better for New Car Buyers in Australia?” Wheels, November 2, 2021,
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Mercedes-Benz 'S New Sales Strategy: End Times For Car Dealerships?

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MERCEDES-BENZ’S NEW SALES STRATEGY: END TIMES FOR CAR

Copyright © 2022, Ivey Business School Foundation Version: 2022-10-20

STRUCTURE AND STRATEGY

THE MERCEDES-BENZ CUSTOMER

THE CUSTOMER JOURNEY AND THE DEALERSHIP

THE NEW SALES STRATEGY

THE WAY OF THE FUTURE?

THE A$650 MILLION PROBLEM

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