East Midlands' car retailer, Ilkeston Co-Op Motor Group, has warned that Mercedes-Benz UK's decision to take direct control of its new car retail operations could be “disastrous” for the consumer, leading to the manufacturer establishing a sales monopoly.
Chris Elvidge, managing director of Ilkeston Co-Op Motor Group, attacked M-B UK's plans to build three 'experience centres' in city locations in the UK. He said: “It could be disastrous for all consumers in the UK if more car manufacturers follow the example set by Mercedes.”
“It's nonsense to think that by removing car dealers, you're also removing the middleman and therefore reducing costs. Car manufacturers become the middlemen instead and rather than adjacent and independently owned dealers in a region ensuring prices remain competitive, the situation is replaced by what is effectively a monopoly.
“Ilkeston Co-Op is not affiliated with Mercedes. However the move could be the start of a trend towards removing car dealerships completely and effectively reducing competition within the car buying market as a whole.”
Mr Elvidge said that reducing competition may push prices up, but it could also result in a lower standard of customer service.
Mercedes plans to build the new centres in London, Manchester and Birmingham. The car company has issued termination notices to all of its dealerships.
Ilkeston Co-op Motor Group currently has the following network of franchises: Alfa Romeo in Nottingham and Lincoln, Citroen in Grantham, Fiat in Nottingham and Lincoln, Hyundai in Derby, Mansfield and Lincoln, Mitsubishi in Mansfield, Nissan in Nottingham, Burton, Ilkeston and Lincoln, Peugeot in Ilkeston, Alfreton, Grantham and Loughborough, Seat in Derby, Sutton-in-Ashfield and Lincoln, Kia in Burton and Mazda in Derby, Lincoln and Loughborough.