Mercedes New Business Model

[Schizophonic]

Sorry if this has been discussed or not.

I'm in the market for a new car and I've been informed they now perform on a new business model of their own dictated prices or 'best prices' of their cars.
Now I don't change cars every few years and not looked at getting one for 10 years till recently. What does everyone think to this? Is standard practise for other manufactures?

Mercedes-Benz | Buy your way

The new way to buy your new Mercedes-Benz. One price, online or in-store – easy.

www.mercedes-benz.co.uk

 

[Bear]

Ive seen it but Im not sure why they are making so much of a fuss about it. It just looks like they set a price and you cant haggle, and the price they set more than likely is more than you would have paid before all things being equal

Other dealers of different brands say they dont haggle and set their prices to be competitive, or at least they sold me that line

 

[200sols]

I don't mind it to be honest if everyone gets a fairer price rather than just those who will haggle.

 

[dlockers]

I don't mind it to be honest if everyone gets a fairer price rather than just those who will haggle.

We aren't a haggling culture so I agree. Super frustrating to feel you've been ripped off.

I imagine dealerships were fuming though and have special levers for throwing in extra value as required.

 

[Schizophonic]

Well cars are generally people's 2nd biggest purchase next to buying a house. So if you could save a bit of money, then why not try and ask is my opinion...
I'll carry on with the conversation with the dealership and go from there and if the car lives up to the hype it is.

 

[200sols]

Well cars are generally people's 2nd biggest purchase next to buying a house. So if you could save a bit of money, then why not try and ask is my opinion...
I'll carry on with the conversation with the dealership and go from there and if the car lives up to the hype it is.

Many people wont ask and get ripped off, usually those who are most easily taken advantage of as well.

 

[alexp999]

I thought with the dealers being franchises, the manufactuer can't legally dictate the price?

 

[Housey]

Mercedes has a new agency based model which will become a trend I think.

 

[faze_2]

They are not the only brand moving to this model of selling.
https://www.auto-retail.co.uk/agenda/which-car-brands-are-adopting-agency-agreements/

 

[jpaul]

Are mercedes are also selling vehicles to the big lease companies at the same price doubt it - all part of second hand market price control.

The mercedes advert I've seen is also a researched strategy to appeal to female purchasers.

mercedes seem to be saturating tv advertising, pushing their one price strategy, matching tesla's, so, no deals here - except for fleets https://youtu.be/txeqOOH5Avw

 

[sandys]

Hasn't appeared to improve pricing so not sure why I should care apart from if the dealers don't like it, drop the brand and I don't get the warranty support I might need.

 

[X]

Mercedes has a new agency based model which will become a trend I think.

And so it should, the days of dealers blagging anything they can need to come to an end.

I took our Mini for a service a while back, they quoted up over a grand. I had a closer look at the quote and they stuck literally every single bit of fluff you could think of on the quote and chanced it. I'll give you one guess how well that went down.

 

[MissChief]

Quite a few manufacturers said they’d be moving to this sort of model post COVID after chasing volume pre. It shouldn’t really be surprising as sales are still low so why not make more profit per sale, even if it means selling less?

 

[Schizophonic]

Thanks for the heads up, as the Agency model is being reviewed and implemented throughout - I wondered if being a franchise meant the sale assistant would take more commission if they got more from the customer? Now like Mercedes if the cars are priced accordingly then there's less chance of those sales executive getting less commission?

 

[jpaul]

And so it should, the days of dealers blagging anything they can need to come to an end.

cost of the maintenance is also something manufacturers are trying to control, double whammy, where do MB stand there.
like tesla monopolizing the repair and diagnostic of their vehicles
"By designing its EVs such that repairs require access to remote diagnostics and over-the-air software updates, Tesla effectively limits anyone other than Tesla from being able to provide maintenance and repair services for its EVs," the suits allege.
With both lawsuits making the same allegations and levying the same charges in the same federal court district it's likely they'll be combined into a single proceeding, as was the case when John Deere was hit with several suits alleging it monopolized repairs and access to parts.
While the Tesla and John Deere cases are ongoing, a lawsuit that accused motorcycle maker Harley-Davidson of similar monopolization of parts and service wound down last year with Harley being forced to add language to its warranties allowing the use of third-party parts and service.

 

[naefeart]

Anything that decreases competition and intra-brand competition in this case, is bad for the customer.

Also, as long as customers have trade-ins, manufacturers can’t completely remove the haggling/negotiation component from the overall deal.

Negotiation is a life skill we use every day. Its not something we should want to remove.

 

[Calpol]

A lot of the manufacturers are going down this route. There are a number of motivations

1. Reduce the cost of distribution - Tesla has at least a $3000 unit advantage over the best. Dealer margins are c10-15% but retained margins are closer to 7% of RRP so intra brand competition and the likes of Carwow broker quite a percentage.
2. Get closer to the customer and have data exclusivity. The received wisdom is that most oems know that the future revenues are not from wholesaling the unit (one off profit) but from an ongoing relationship with customers where they can offer a multitude of service - digital content enabled by connected car, mobility services and other subscriptions.
3. Improve the customer experience - OEm research basically tends towards the pov that customers in general want price transparency and haggle free transactions with more of it taking place online if thats preferred.

We will see variations of the Agency model but fundamentally there will be more price control. It's early days for Mercedes but the dealers gross profit is reduced vs last year because they are only paid a handling fee which is a lot less than the franchise margin. However some costs are now with M-B and the intention seems to be not to make the dealers materially worse off.
Mini is due to follow in 2024, Volkswagen Group similar, Stellantis have just delayed six months. Its fraught with systems complexity and a big change management project but the course is set and if it saves money then more will follow.

 

[Mr_Sukebe]

Does this really matter anymore?
I did think that most new private purchases were via PCP/PCH and that all the end customer seems to be interested in is the monthly cost.