Mercedes-Benz India Announces Direct-To-Customer Sales — No Dealer Discounts!

Mercedes-Benz India has introduced the 'Retail Of The Future' sales model in the Indian market. Under this new sales model, Mercedes-Benz is attempting to centralise the process of selling a car to a buyer. The new initiative makes sure that all parties involved, including the customer, the dealership, and Mercedes-Benz India are all profited.

The purchase of buying a car from the buyer's perspective has always been pretty simple. Walk into a dealership, select the car, pay a booking amount or the full amount, decide on finances, etc, and walk out. Many brands are now taking orders for cars online and this too is a similar process. The car is then delivered to the buyer either at the dealership or at home.

However, it is a complicated process that takes place in the background. The dealer must check for the availability of that particular model in that particular variant and colour. If it isn't available in stock, the dealership then places an order with the manufacturer. The manufacturer then produces the car and ships it to the dealer.

If the dealership in question is big and expects a lot of customers, then the dealer has to predict the model, the variant and the colour which will sell the most and then place an order based on that prediction. It is a gamble that pays off often, but sometimes doesn't pay off. When it doesn't work out well, the dealer is left with cars in the inventory that don't seem to sell at all.

This is exactly how the car retail industry has been functioning until now. All manufacturers function on a similar sales model except for brands that make exotic cars. These cars are manufactured on a made-to-order basis.

Now though, Mercedes-Benz has set out to change this sales model with a new initiative called "Retail Of The Future." The model is customer-centric but also gives benefits to the franchise partners of Mercedes-Benz and. It will also help Mercedes-Benz greatly streamline its manufacturing process.

Under the new sales model, the dealerships or franchise partners would not need to incur the inventory cost. Mercedes-Benz India will take ownership of the stock until it is sold to the buyer. The inventory and stock will be centralised, allowing all dealers to access a list of cars available with any other dealer in the country.

Under this model, a buyer will as usual walk into a dealership or log onto the brand's website and select a particular model, variant, and colour. The franchise partners will then be able to confirm if those specifications match any car in the stockyard. If unavailable in the stockyard of one dealership, the now centralised data will be able to show if another dealer has that spec.

If another dealer in another part of the country has that particular specification in stock, the car can be transported to the city in which it is required and then delivered to the buyer. If the required spec is unavailable with any dealers across the country, an order will be placed and Mercedes-Benz will manufacture the car and then ship it.

This centralised system benefits the buyer as it gives them more choice to buy. A customer in one part of the country can opt to get a car that is stocked in a different part of the country. The prices are centralised as well and this gives the buyer greater clarity.

Dealerships and franchise partners benefit from the new sales model more than anyone else. The dealerships will have better financial health thanks to the lower cost structure and zero inventory. The task of providing just the right car to the buyer, in just the right trim that the buyer has specified has now become easier thanks to the centralised system.

Mercedes-Benz profits from it too thanks to greater clarity in sales, and a centralised system makes order tracking easier. The Mercedes-Benz "Retail Of The Future" sales model will be implemented in the Indian market from the fourth quarter of 2021.

Martin Schwenk, MD & CEO of Mercedes-Benz India said, "Introducing Retail of the Future is a firm step towards establishing an ecosystem that is customer-obsessed. It empowers customers to have a hassle-free and completely transparent customer journey, experienced never before."

He went on to say, "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. Franchise Partners continue as brand representatives, maintaining their strong connect with customers and striving to offer the best customer experience in the market."

The brand has also announced the arrival of the Mercedes-Maybach GLS600 in India. The luxury SUV for the elite will be launched in the Indian market next week.

Thoughts On Mercedes-Benz Retail Of The Future Customer-Centric, Centralised Sales Model

Mercedes-Benz has always been a customer-centric brand. It has innovated and improvised customer service initiatives for decades now, and the brand has now introduced this unique sales model. It is how the supercar and sportscar market has functioned since the very start. In this premium mainstream segment though, it is new and is bound to make the whole process from booking to delivery super smooth.

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Article Published On: Wednesday, June 2, 2021, 15:03 [IST]
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