Are multi-million ringgit dealerships still valid for Mercedes?
The Mercedes Benz E-Class 2020. (Mercedes Benz pic)
A week ago, DSF highlighted news that the long-established Mercedes-Benz dealer in Malaysia, Cycle & Carriage had sent VSS letters to all its employees.
This is a voluntary scheme and it shows that Cycle & Carriage is the first of many large-scale car dealerships looking to reduce their head count (business continues at all their showrooms) as the Covid-19 pandemic continues to exert pressure on the economy.
In the report, DSF mentioned that premium cars brands like Mercedes-Benz were now looking at moving their products online and to have fewer showrooms and sales advisors as this trend was growing overseas.
This statement elicited negative and angry comments from some readers who accused DSF of being insensitive and rather negative in its outlook.
DSF did explain that this is happening in other countries and that many good friends and relatives working with various auto brands would be experiencing job losses in the future as well.
So, here below is some information to digest about what is happening. DSF had no intention to upset anyone.
In October 2019 Mercedes-Benz India announced the launch of its e-commerce platform with the aim to sell 25% of its cars online by 2025.
The Mercedes-Benz India e-commerce platform was designed to assist customers to book and configure cars as well as digitise their transactions.
Mercedes-Benz also listed pre-owned cars on the e-commerce platform. Then in January 2020 they listed their dealers of pre-owned cars and new cars.
At the time, eight out of 21 dealers agreed to be part of this online sales strategy. As a result, online sales reached some 12% in India.
By February the same year, some 150 used vehicles were sold online with success.
The Mercedes E-Class Coupe. (Mercedes Benz pic)
The first of many
Mercedes-Benz is the first luxury carmaker to embark on online sales for its vehicles. Other players in the segment such as BMW, Audi, and Jaguar Land Rover, will follow soon.
Key facts on Mercedes-Benz’s global sales strategy:
- With its global sales strategy ‘Best Customer Experience 4.0’, Mercedes-Benz consistently focuses on its customers and their needs. Digital offerings in sales and after-sales are increasingly coming into focus. Customers want to be able to get in touch with their favourite brand anytime, anywhere.
- Mercedes-Benz, together with its dealer partners, has been investing a three-digit million amount worldwide in the further development of sales since 2013.
- Together with its trading partners, Mercedes-Benz has been investing a three-digit million amount worldwide in the further development of sales since 2013.
- Almost every vehicle purchase already begins online today. Around 90 percent of customers already come into the dealerships well-informed. Previously, customers visited dealerships an average of eight times before deciding on a vehicle, today it is an average of one to two times before it comes to a purchase.
- With the latest update of the vehicle configurator in more than 40 markets, the speed, navigation and design has been improved for customers. A highlight to this is the improved integration with connected options such as booking a test drive.
- Mercedes-Benz was the first car manufacturer in Germany to launch a nationwide online store for new vehicles in 2016. Since then, the range of online stores for new and used vehicles has been expanded to more than 14 markets.
The Mercedes S-Class cabin. (Mercedes Benz pic)
- Mercedes-Benz expects to achieve a quarter of global passenger car sales through online channels together with its trading partners by 2025.
- China is considered a pioneer in digitalisation. In recent years, Mercedes-Benz has gradually expanded its digital offerings and channels in China in order to offer customers a digital luxury experience. Adoption of digital offers has increased rapidly especially in recent months: in June the share of customers in China who signed electronic financial contracts online was 85 percent.
- Following South Africa, customers in Sweden can also experience a seamless and convenient luxury experience, as all possible touch-points for customers are seamlessly and digitally integrated when buying a new vehicle. In 2021, Mercedes-Benz will also switch to direct sales of new vehicles in Austria.
- In spite of all digital offerings, physical retail remains an essential part of the customer journey. But dealerships are also experiencing a digital transformation with new services and offers for customers.
- The digitalisation of sales at Mercedes-Benz also includes the workshop and after-sales business. The company expects that 80 percent of all service appointments will be booked online by 2025. Customers will receive individual offers and appointment suggestions which they can easily accept with just one click.
- Mercedes-Benz will continue to invest in the digital transformation of its sales and after-sales. A seamless and comfortable luxury experience along the entire customer journey will be of crucial importance for customer satisfaction in the future.
So, with the above information, it is easy to understand the changing automotive landscape and Mercedes-Benz will be the first in Malaysia to introduce this in coming months.
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