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M-B and network set for legal fight

DaimlerChrysler UK and its Mercedes-Benz dealer network were this week on a collision course for a damaging court-room battle after management staff, including M-B UK director Dermot Kelly, brushed aside calls for talks.

The Mercedes-Benz UK dealers action group received no signal of conciliation from the manufacturer when its deadline over the mass contract termination expired.

Some Mercedes dealers hope a compromise can be reached but it was difficult to identify one:

  • Mercedes-Benz wants to sell cars through its own outlets in the London, Birmingham and Manchester areas, and reshape other territories.
  • M-B dealers insisted their legal advice suggested they could force the carmaker to back-down.

    This week, Mercedes-Benz UK director Dermot Kelly was negotiating with dealer groups about territories they would be offered.

    Nick Adams, main spokesman for the action group, said he was “extremely frustrated and annoyed” that Mr Kelly would not talk to them.

    “We are the people expressing the fears of a loyal network and yet we are well down the pecking order,” said Mr Adams. “It is extremely arrogant, but we have been told that if we stick together, we can win this battle.”

    Mr Adams, managing director of John Tallis (Bath), said he felt threatened as Sytner Group held an adjoining territory.

    Mr Adams said their barrister advised Mercedes was not justified in giving the 12-month notice because it was reserved for emergencies. These might include the destruction of a plant, making supplies impossible.

    Dermot Kelly disputed the claim, saying there were precedents in the EU.

    “We feel it is necessary and can substantiate in court if we have to,” he said. “And we have never said 12 months only – we may extend it for some dealers.

    “People say it is the wrong time to reorganise the network because our market share is rising. I don't want it to go wrong, which is why we are acting now.

    “I thought it was what people in business were supposed to do – we are looking at the needs of our customers. I am thinking of what is right for our brand.”

    Jurgen Hubbert, Mercedes-Benz boss for DaimlerChrysler, said at Geneva motor show: “The UK dealers know why we carried out the review. Sure, there are a few who will lose outlets but that is the way of business.”

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