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Mercs for the masses

Mercedes has showaced its entire range to 800 fleet managers in a bit to boost its corporate presence.

More than 80 cars, involved in track driving, roadcraft tuition, ABS and ESP demonstrations, and off-road driving were displayed over the three day event.

Nothing especially unusual in that, you might think. Plenty of manufacturers hire tracks to give customers the chance to try their wares.

But for Mercedes-Benz, this event signals the start of an offensive for the fight back against the dominance of BMW and Audi in the fleet market.

While BMW and Audi have courted fleets for a number of years, and made significant gains as a result, Mercedes-Benz has always remained rather aloof. It’s an attitude that some critics in the industry have called plain old snobbery – that a cash-rich retail customer is more desirable than a volume-based fleet buyer.

It’s a simplistic notion, and certainly a mindset that nobody at the firm would admit used to exist but, true or not, it is a perception that executives at Mercedes-Benz admit they have been working to change. And in the future they believe their action will prove that corporate business is very much a priority.

Simon Oldfield, sales director, Mercedes Car Group, reckons fleets will start to see the shift in approach soon, thanks to new, UK specific models and the fact they have been talking to more corporate customers about what they want.

He said: ‘We’ve really come to realise just how important the fleet market is. Our strength has traditionally been in retail sales, but the market has been shifting over the past 18 months.

“We’ve put together some forums with key fleet people to find out what they think of us and what we are doing well, or what we could do better.

“We’ve got a really young range. By the middle of 2006 the oldest car in our range will be the SLK which will have launched two-and-a-half years ago.

“We’re starting to get more UK-specific cars as well, like the C-class Sport Edition. We’re the third biggest market in the world and it means that we are getting more clout on getting specification for cars that really suit the UK market, and in particular, the corporate buyer.’

#AM_ART_SPLIT# National corporate sales manager Colin Niklas agrees: “We have to invest in corporate business. Two to three years ago, 25-33% of total sales were corporate and the rest retail. In the next year, we will be aiming at 50%.

“We always have done well in the big 600-plus fleets, where there is a very distinct hierarchy and very high end top executives, but BMW and Audi have been better in the 25-300-sized fleets.”

As a result, Mercedes-Benz is investing more than £3 million on its corporate department in a bid to bring it on to level terms with its two big German rivals. At the moment, it has a 3.8% share of the total fleet market, while BMW sits at around 4.6%.

In the smaller sub-100 fleets, that disparity increases to 2.8% for Mercedes-Benz, and 7% for BMW.

Niklas believes that Mercedes-Benz can increase its share by 2% in the next year – effectively an increase of 3,000 units.

And to do that, Mercedes-Benz needs more people talking to more smaller fleets, securing more business. So it is recruiting 10 local business managers, reporting to the existing five corporate sales managers. It is also taking on a strategic account manager for very large fleets.

So it is putting money – and people – where its mouth is. Oldfield and Niklas believe the raw materials, the cars, are already in place. Which is why we are at Silverstone. Mercedes-Benz has a lot of new cars. 2005 was the busiest period of launch activity for the firm ever. And with S-class, R-class, GL-class, among others, launching in 2006, life is not going to get any more sedate.

As Oldfield joked: ‘The range is now so broad, if we struggle to keep up with all the changes and launches, what chance has a fleet manager got?! Seriously though, that’s why we are here, showing them what we have to offer.’

And certainly the constant stream of A-classes, B-classes, C-classes, E and S-classes, AMG models, SLKs, CLKs, smarts and Maybachs streaming round the track reinforces just how far-reaching the range is.

So with the SLK the oldest car in the range, the product side is sorted. The next step is the dealers, who will remain a key point of contact for most fleet business.

Oldfield admitted that some of the experience in the dealerships had not been what was expected of Mercedes-Benz, and that many drivers had found inconsistent levels of service. He believes that the massive restructuring of that side of the business had led to a lot of staff uncertainty due to changes in the management structure, new owners and moving premises.

The vast majority of Mercedes-Benz’s corporate business goes through its retail network and Niklas says they are working on getting the dealers better margins for fleet business to incentivise them in the corporate market.

He said: ‘Our whole strategy is a complete change of approach. We have incentivised retailers with a corporate sales programme, with the winner going to Dubai for a week. It illustrates just how seriously Mercedes-Benz is now taking the corporate market.’

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