Mercedez Benz, Bold Move, Makes Major Changes in Retail Strategy in India

Merecedez-Benz India Pvt Ltd, is the nation's largest luxury vehicle manufacturer, on Wednesday, it has made a bold move, by announcing major changes in its vehicle retail strategy. The company is now, keen in owning the entire inventory, instead of pushing most of it, to its dealers. The company would also bill the customers directly instead of dealers and it has termed this new strategy as "Retail of the future".

Impact of Covid-19 in Automobile sector

There has been a prolonged slowdown in the Indian Automobile sector because of the economic slowdown, which has been made worse due to covid-19 pandemic, auto companies are presently taking varied steps to improve the financial health of its dealers and at the same time they wish to ease the pressure on these entities as well.

Also, it has been found that, the aftermath of the covid-19 outbreak, physical visits by the customers at dealerships, for vehicle purchase inquiry, are likely to take a hit and the companies are planning to directly approach and service them via digital platforms.

Company's new Business Model

The company said in a statement, that "As per the new business model, the Mercedes-Benz India would own the entire stock of cars and it would sell them through the appointed franchise partners. And it will also invoice the new cars to the customers directly; it would process the order and fulfill them, by providing one transparent price and purchasing experience for its customers".

Additionally, it has also stated that primary roles as well as the responsibilities of the Mercedes-Benz franchise partners (dealers) would include establishing as well as maintaining customer contacts, development of the market and facilitating the sale of its cars.

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

Win-Win Solution

As per the Martin Schwenk, Managing director and chief executive, Mercedes-Benz India, this long-term strategic move would help strengthen the company's customer focus, by introducing a fundamental transition in the retail business in the market. It would also deliver a win-win solution for both, customers as well as dealers, at the same time, it would be underscoring the clear vision for a future which empowering, sustainable and digital.

We are happy to have the collaboration of our franchise partners in this transition, further, we would empower them and make it possible to have, significantly less operation and financial risk, this would result in both profitable and sustainable business models. The franchise partners would continue as brand representatives, they would maintain strong connect with customers and they would strive to provide the best customer experience in the market, stated Schwenk.