LSH Auto Australia is currently reviewing its plans for a new Mercedes-Benz lifestyle mega-store for Melbourne as it waits to see how car retailing in Australia recovers from the Covid-19 pandemic and assesses the damage to the economy. Planned changes to the Mercedes-Benz retailing model are also now being factored into the investment.

It has been an open secret that the property division of Hong Kong-based LSH Group, which was responsible for building the company’s Mercedes-Benz of Brisbane Breakfast Creek lifestyle store, was looking at various options for a lifestyle precinct flagship store for Melbourne.

But the company has kept the details very close to its chest as it cogitated its ideas and designs and sounded out planning approvals for the area around the current store in Kings Way just south of the Yarra River. The company owns a site in Southbank in the vicinity of the current Mercedes-Benz of Melbourne dealership.

Managing director, John Good, told GoAutoNews Premium in a recent interview to coincide with the first anniversary of the Brisbane store: “The global environment has changed considerably in the past 12 months.

“As a group, we were always taking a long-term approach. We are still discussing plans in terms of what we can do for Melbourne, but some areas of the project are going back to the drawing board in terms of the pace of change,” he said.

“Brisbane is really excellent. So Brisbane has been a very good learning for us in terms of the precinct strategy and in terms of what we can do (with the concept). Digitalisation is also a key focus as we consider what steps we will take.

“But it is not a blueprint where we just take the plans out of the drawer and replicate a mirror image in either Melbourne or Sydney.

“So, we have taken each of the elements of what we have learned out of this Brisbane operation which have been very positive and very constructive and then we have looked at what would be the right approach for other territories we operate in.

“But what is certainly very interesting for us is the precinct concept and we know we need to ensure that we are really at the forefront of how we integrate all of the different elements to create the precinct and ultimately the experience. Combining these many unique elements including digitalisation will streamline the purchasing process and ultimately the ease of doing business.”

Mercedes-Benz Australia’s plan to transition into an agency model of retailing also clearly has to be considered in any future dealership developments.

“The business environment is always dynamic but I think it is fair to say that, at present, there are a great number of moving parts to be considered.” Mr Good said.

“Proposed changes may see dealers not needing to have as much stock in the showroom.

So, therefore, do you need to have as much space for cars and then that would that dictate the size of the showroom? That’s just one consideration and there are many others.

“So, all of the change that is occurring at the moment is why we have put a few things on hold until we see how the new business environment settles.”

By John Mellor