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Mercedes-Benz Direct closes in on network target

DaimlerChrysler UK has purchased a site in Manchester to house its seventh Mercedes-Benz Direct used car operation. The company is looking for a further two sites in London, and is targeting a total network no larger than 10 outlets.

Only the Bristol and Poole operations will fall outside DCUK's wholly owned market areas in the London M25, Manchester and Birmingham regions. The Direct network, backed by the website, has given DCUK substantial information about the used car market.

The company has been able to control residuals on the 2000 A-class models supplied each year to Easycar - analysts had expected residuals to slump due to oversupply - and has now extended the replacement cycle to 12 months. “The Direct sites help us to understand the used car market. We are able to capture information on the type of models, trim spec and engines that customers are looking for and reposition accordingly,” says Dermot Kelly, DCUK director of passenger cars. “Our residual values are improving because we are able to balance supply with demand according to the market's needs.” The Mercedes-Benz Direct sites are each retailing 120 used cars a month - 40 per cent are more than three years old.

Combined with its dealer network, which according to Kelly has “picked up its performance on used cars”, DaimlerChrysler now handles nearly 40 per cent of all changes of ownership on used Mercedes in the UK. It has set a target of 50 per cent.

Kelly believes the Direct network gives DCUK a distinct advantage over its premium rivals as the sector enjoys surging sales. “There are a lot of brands that are selling a lot of cars at the moment in the prestige market, but what will they do in three years time when these cars return to market,” he says. “We have an advantage because we can control our RVs through our own network.”

Mercedes has recently acquired three more new car showrooms in London and expects 60 dealerships to have changed ownership under its market area concept (MAC) by the end of the month. City Motor Holdings opened the first MAC showroom in Exeter last month.

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