Dermot Kelly, Mercedes-Benz director of passenger cars, says the DCUK strategy launched in 2001, where it divided the country into 27 market areas – not including the wholly-owned London, Birmingham and Manchester territories – was intended to interlock the Mercedes territories with the ChryslerJeep network to produce a joint network where appropriate.
Drayton, Richard Jackson and John Weir are all Mercedes-dedicated retailers who are now looking to invest in ChryslerJeep. “That was always our way of thinking to have the synergies in the back office and the branded showroom sites, and it's starting to happen,” says Kelly.
“I am putting forward Mercedes dealerships to ChryslerJeep in areas where it has no representation, and it's up to them whether they choose to go with them.”
Mercedes-Benz dealers are also being encouraged to expand their Smart facilities as the company increases volume by adding more models to the range. Currently, 54 of the 57 showrooms are on the same site as the Mercedes business; the three standalone premises are operated by DCUK.
“As the viability for investment grows, we expect more visibility and our dealers to have separate showrooms,” says Jeremy Simpson, head of Smart. “We already have several dealers asking for dedicated towers to sit outside their dealerships – I expect the first of these to go up in the next 12 months.”
DCUK will work closely with those dealers to assess the marketing impact on sales of having a separate Smart tower. Retailers will be expected to foot the bill, estimated at £150,000 per tower.
Smart has revised its business plan following the decision to produce the Formore SUV. It will now no longer breakeven in 2005 – the new target is 2007. The company is also considering other derivatives based on the Forfour platform, including a mini MPV.
Meanwhile, DCUK executives say the Smart Forfour, due for launch in September, will not compete with the Mercedes A-class because the next generation model, due for launch in 2005, will be larger than the current model.
“It will leave a premium gap in the B-segment for the Forfour,” says Simpson. “The new A-class will be competing with the VW Golf.”