Experts think Mercedes Benz Korea is looking to move to an agency model where direct sales are pushed to the fore
https://www.carscoops.com/author/sam-d-smith/
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by Sam D. Smith
4 hours ago
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Industry experts claim that Mercedes is looking to move towards a direct-to-consumer sales model in South Korea. The German manufacturer chose not to add to the speculation that it’s looking to take a leaf out of Tesla’s book by eliminating dealerships and streamlining deliveries. However, a spokesperson for the brand confirmed that talks were being held with dealers without elaborating on the details.
Mercedes has already made noises about revamping its European sales channels, cutting dealership numbers, bolstering online sales, and increasing direct sales to 80 percent by 2025. The new approach will see Mercedes cut the number of large showrooms it holds in mature European markets while establishing “agencies” that handle deliveries.
Experts allege that Mercedes-Benz Korea recently spoke to its dealers about similar measures as the company looks to save on labor costs and the number of showrooms in South Korea. Such a move would also be seen as beneficial for reducing distribution costs in the face of higher-priced EVs.
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Related: Mercedes Cutting Dealer Numbers, Intends To Move To Direct Sales
Speaking to The Korea Times, Lee Tae-hun, a professor at the Department of Car Business at Daekyeung University, said that the expansion of online sales is becoming an industry trend. “Mercedes-Benz Korea has already been selling certified used cars on their own online platform. As they do with used cars, they can sell new cars this way anytime. Hyundai Motor and Kia are also entering the certified car market here and are openly looking to bypass dealerships and sell cars online. It’s just a matter of when and I think the expansion of online sales is the unavoidable direction of the auto sales industry, as consumers have already adapted to buying online during the pandemic.”
While many automakers have been open about the advantages of a direct sales model, it’s not for all territories. Like Mercedes, BMW and Mini have been shifting their European distribution model away from traditional dealerships and towards a direct sales program. However, the company said that it had no plans to implement such a strategy in the U.S. or China.
If Mercedes were to plump for a direct sales strategy over the traditional dealership route, it could be an early example for Asia, of which you can be sure many other manufacturers will be taking note of.
