Mercedes-Benz will be shifting its retail sales structure in India to a ‘Direct-to-Customer’ model, under which it will own the entire stock of new cars for sale. The move is aimed at bringing better financial health for its dealer partners while offering customers uniform transparent prices, a wider choice of vehicles, and a seamless purchasing experience.
Under the new structure termed as 'Retail of the Future' (ROTF), German luxury carmaker will bear the cost of inventory directly on themselves and offer one specific price for each model across the country. The invoicing of the cars will also happen directly at the company and not with the dealers, and customers will have access to a larger inventory pool managed and owned directly by the company.
The primary role of the dealer would now be establishing and maintaining customer contacts, developing the market, and facilitating the sale of cars. With the burden of inventory cost taken out of their books, Mercedes said it would be beneficial for dealer profitability as well.
Martin Schwenk, the Managing Director, and CEO, Mercedes-Benz India, said, "This long-term strategic move will strengthen our customer focus by introducing a fundamental transition in the retail business in the market. It also will deliver a win-win solution for both customers and Franchise Partners, underscoring our clear vision for a future that is sustainable, empowering, and digital."
"It empowers customers to have a hassle-free and completely transparent customer journey, experienced never before. We are also glad to have the collaboration of our Franchise Partners in this transition, further empowering them to have significantly fewer financial and operational risks, resulting in a profitable and sustainable business model. Franchise Partners continue as brand representatives, maintaining their strong connection with customers and striving to offer the best customer experience in the market. It also allows Mercedes-Benz to stay obsessed with customers and remain a future-ready pioneering brand, ahead of the curve," he further added.
'Retail of the Future' (ROTF) will kick off in the fourth quarter this year.