Are multi-million-ringgit dealership still valid for Mercedes?
A week ago we highlighted news that 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 push the economy down and reduce the amount of money moving around the economy.
In our report we mentioned that premium cars brands like Mercedes-Benz are looking at moving their products online and to have less showrooms and sales advisors as this trend is growing overseas. This statement brought some negative and angry comments from some of our readers saying that we were insensitive and very negative. We did explain that this is happening in other countries and we had good friends and relatives working with various auto brands and will be seeing job losses in the future. So, here below is some information for you and hopefully the rest to digest and understand what is happening. We had no intention to upset anyone.
For Example
In October 2019 Mercedes-Benz India announced the launch of its e-commerce platform with the aim to sell 25 percent of its cars through via online by 2025.
The Mercedes-Benz india e-commerce platform was designed to assist customers to book and configure cars but also have capabilities to digitize their transaction. Mercedes had 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, 8 out of 21 dealers had agreed to be part of this online sales strategy and online sales had reached some 12 percent in India. By February the same year, some 150 used vehicles were sold online with success.
The First Of Many
Mercedes-Benz is the first luxury carmaker to go for online sales of its vehicles. Other players in the segment such as BMW, Audi, and Jaguar Land Rover, will follow soon.
Executive Update on ‘Best Customer Experience 4.0’ – fact sheet including quotes from Britta Seeger from Mercedes-Benz.
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 favorite 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.
- 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 digitalization. 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 suggestion 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.
