Mercedes-Benz has been in talks with dealers over the past month about how it can help their businesses in the fourth quarter as recession looms and car sales slump.Agreed action includes flexibility on product allocation to help dealers move into a healthier position on stock, and basing Q4 bonus initiatives on per unit per model sales rather than overall volume targets to reflect availability and customer demand.
“In the past, dealers had healthy support from the banking industry. That might not be available any more,” said Mercedes-Benz UK president and chief executive Wilfried Steffen.
He believes dealers need to focus on additional revenue streams, such as finance and servicing packages.
“We expect to increase finance deals through our captive house and it’s an opportunity for dealers to make better money at lower volumes,” he added.
Steffen is in talks with the Mercedes head office in Germany about realignment of the 2009 model allocations.
He is anticipating a slower start to the year and wants to reflect that in the production plan.
Smart, CLC, A-Class and B-Class are in demand but short supply, while showroom traffic should rise with the launch of the new E-Class in summer.
“My job is to adjust production and availability to market requirements,” Steffen said.
That flexibility also runs to the way he wants field staff to treat dealers. Mercedes has just completed staff training designed to improve their understanding of dealers’ businesses.
Dealers have been given the freedom to find regional solutions to regional problems without necessarily having to adhere to a nationwide ‘one-size fits all’ approach.