Horst von Sanden

MERCEDES-BENZ in Australia says it would have liked to have introduced the full agency model across all vehicles in its range and across its dealer network but decided to let the agency business model evolve and develop around its new EQ electric vehicle in order to effectively manage any issues that might arise.

The company said that all 54 Mercedes-Benz Cars dealers were offered the opportunity to apply to sell the new EV as agents. The nine retailers were chosen to be agents on the basis of their greatest sales potential.  The company says that further appointments will be made as EV sales increase and the range expands.

Horst von Sanden, managing director and CEO at Mercedes-Benz Australia/Pacific, told GoAutoNews Premium: “We are seriously looking at” extending the agency model across the brand’s line-up.

“This has been discussed by us for a long time but the current business model has been working for a long time, so at the moment it is only EQC,” he said.

Within the Mercedes-Benz world, the agency model was introduced in 2017 across the brand’s range in South Africa and in Sweden where there are north of 20 Mercedes-Benz dealers for a population of 10 million people.

Asked if he was encouraged by early results from those countries, Mr von Sanden said: “I think we are encouraged. It is early days. South Africa is a very challenging market and we need to know if things don’t go so well whether it is the market conditions or the (agency) model.

“In Sweden it has only been going for six months so it is a bit too early.”

Mercedes-Benz Australia/Pacific director of customer management and network development, Jason Nomikos, said: “We looked closely at many different retail models. We looked at Sweden and South Africa, which is a bit more advanced. They launched at the end of 2017.

“We wanted to make sure that our model was adapted to our market rather than using a blueprint to just copy and paste from another market.

“We looked at other options such as just selling online and being in competition potentially with our retailers but we thought that would not be an ideal customer experience which was our priority.”

Mr Nomikos said that while buyers were increasingly expecting to buy online and while fewer people were visiting dealerships, it was important to have customers access the range both online and offline and that the experience should be consistent.

He said they looked at the Toyota agency arrangements in New Zealand and saw that Toyota was testing the agency model in the UK by selling the new Supra under an agency style of arrangement.

“So we thought that the purest and cleanest model was to introduce it with EQC,” he said. “So we are really going to learn around a model that will really be a private purchase and see where it takes us.”

Asked if some dealers had expressed a desire to extend the agency model across the entire Mercedes-Benz range, Mr von Sanden said: “If the other two markets had launched earlier and there was now some evidence and some proof that it works, it would be easier.

“But today it is a concept, an idea or a philosophy and I think without being negative about it our industry, especially in retail, has a very conservative approach and before we start going into such a massive change we would all love to see some proof (that it works).

“So that holds it back at the moment. There is a lot of constructive discussion around it but (it is too early) to describe it as a euphoric move forward.”

Asked if Mercedes-Benz would extend the agency model next to the S-Class, for example, Mr von Sanden said: “It is very early days, we are obviously thinking about the concept as such but we have not determined the specific next steps. At the moment, that is too premature.”

This is the only partial agency model in the Mercedes-Benz world at the moment.

By John Mellor