Why Mercedes-Benz Australia is changing the way it sells cars to an agency sales model and how it will be different from Honda

Mercedes-Benz Australia will be the latest local car brand to move to an agency sales model in 2022, following Honda Australia’s pivot earlier this year.

However, while Honda pre-empted the switch with the prediction that its sales would halve within two years, Mercedes-Benz has not made such forecasts for its future.

In fact, Mercedes-Benz Australia expects its sales to remain fairly steady next year, despite a slew of new models including the new-gen C-Class on the horizon, because of the ongoing semi-conductor shortage playing havoc with supply chains.

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This raises the question, what is so different about moving away from the traditional sales model and why is Mercedes-Benz making the switch?

Whereas the traditional sales model sees a network of dealers buying stock from Mercedes-Benz and then selling them to customers, the agency model means the local division of the brand will hold and sell all stock.

This means sales can be done online, and delivered to dealerships for customer pick-up, with all models nationwide featuring a haggle-free, fixed price for transparency.

Of note, this price list is yet to be finalised, but expect to see some increases as all models will feature drive-away pricing.

Dealers will also be paid a fee for each delivery, rather than trying to maximise profits on each sale.

Or as Mercedes-Benz Australia puts it, the idea is to create a more “customer-centric experience”.

“In January 2022 Mercedes-Benz Cars Australia will enter the next exciting chapter of our history when the Mercedes-Benz Agency Model launches nationally for the sale of new passenger cars, better delivering to the demands of modern Australian consumers,” a Mercedes-Benz spokesperson told CarsGuide.

“At the heart of this transformation is our key focus to create a customer-centric experience that enhances the buying process by providing every Mercedes-Benz customer with transparent, market driven pricing, more vehicle choice and greater convenience.

“They no longer need to haggle or negotiate for the best price on a car because there will only be one price and they will be able to access any vehicle wherever they go – across the country or online.

“Our dealers will become agents and we continue to value them as important partners in our business and a central part of the customer experience, as they are involved in in-store sales and in delivering vehicles to customers.

“In addition, from January 2022 the process of purchasing a new passenger vehicle online will be made more simple and convenient for the consumers who wish to do so.”

Australia won’t be the only market moving to the new sales model however, with New Zealand and Germany also set to adopt the change soon, while operations in South Africa, Sweden, Austria and India already operate this way.

Mercedes-Benz Australia is also quick to point out that moving to an agency sales model won’t be cutting dealers out, despite transactions being handled directly by the brand, with outlets essential in person deliveries, vehicle handover and servicing.

Mercedes’ 53-strong dealer network will also not be affected by the change and “remain an important part of our operation in Australia and have not terminated any existing contracts to introduce the model, nor reduced any showrooms as a result”.

However, some dealers have banded together to take court action against Mercedes-Benz in reaction to the change, claiming they are not adequately compensated under the new agreement.

Mercedes-Benz Cars Australia would not comment on matters while still in court proceedings.