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Insight: Mercedes-Benz Retail

With substantially more than £100 million invested in it since its creation six years ago, many have viewed the Mercedes-Benz Retail UK business as something of a white elephant.

Rumours are rife about how the group, which owns all Mercedes dealerships in the London, Birmingham and Manchester market areas, is losing huge sums of money for Mercedes-Benz and how the German head office regrets venturing into car retailing but doesn’t want to lose face by withdrawing.

All such claims are comprehensively refuted by Mercedes-Benz Retail UK managing director Neil Williamson, the third man to head the wholly-owned network following Geoff Brady and Ewan Ramsay.

He concedes that the huge investment sums and relocation of showrooms had “caused some grief on the way”. He says the restructuring process is now almost complete and the group can now focus on achieving its objectives for Mercedes-Benz. Namely, to make money and to have satisfied customers and happy staff.

In that respect, says Williamson, Mercedes-Benz Retail is no different from any other franchised dealer. Where it does differ is in the scale – Mercedes-Benz Retail accounts for around a quarter of the Mercedes-Benz business in car sales, servicing and parts.

“Our relationship with Mercedes is a very close one,” Williamson says.

“But we have the same terms and conditions and standards as normal dealers.

We get no special treatment; we have the same opportunities as everyone else.

Our aspiration is to make the same return on sales as the rest of the network – the target is 2%.”

That closeness gives Mercedes-Benz’s management a unique insight into car retailing.

Williamson sits on the Mercedes-Benz UK board and can give the retailer perspective on new ideas.

“They listen and if I ask them to tweak something, they invariably do,” he says.

Williamson, a Renault graduate, spent 13 years at Nissan before moving to the then DaimlerChrysler UK business four years ago as network development manager.

He is two-and-a-half years into his current position.

He says the “highs are higher and the lows lower” than working on the manufacturer side.

He can’t see himself anywhere else.

#AM_ART_SPLIT# “Everything happens more quickly and that appeals to me,” Williamson says.

“You have to act and think quickly – that’s like a drug.

Retail is all about today and you see results quickly.

That immediacy is really enjoyable.”

His first year was a steep learning curve, getting to grips with the pace of retailing, understanding the performance culture and working out how to get the most out of the business.

He joined as the group first broke even. It’s now “well on the way” to hitting its 2% target. Responding to claims that the performance is underpinned by manufacturer ownership, Williamson says: “Our numbers are in the pot with all other franchised dealers – we learn from them and they learn from us.”

He adds: “Mercedes has network development guys who are a conduit for sharing best practice.

It’s important for us to be involved.”

Best practice is shared with Mercedes-Benz’s other owned networks.

It owns dealers in 15 countries, mostly in the bigger European cities, and it uses that buying power to get better deals in areas such as oils, which has saved hundreds of thousands of pounds.

The UK network, with 22 showrooms and eight Direct used car centres, is the biggest after Germany.

Williamson, who sits on the dealer council (“a good therapy session”), says that performance in the London market area is running ahead of Manchester and Birmingham.

He wants the business to be a benchmark for the Mercedes retail network.

“My definition of success is buying another territory,” Williamson says.

“If we were allowed to expand by Mercedes-Benz, it would be the ultimate demonstration of our success.

To be even considered for another territory means respect and trust from the Mercedes-Benz directors.”

#AM_ART_SPLIT# The Brooklands challenge

Sitting proudly as the jewel in the Mercedes-Benz Retail network or the ultimate illustration of Mercedes-Benz’s folly?

Opinions are mixed on the unique position occupied by the massive Brooklands brand centre, but the view of Neil Williamson is unequivocal.

“Brooklands was a huge challenge but it is doing exceptionally well,” he says.

“It has sold twice as many cars into its territory than anyone else in the network (penetration of the premium market is around 18%) but it hasn’t sold outside its territory – it’s not creating havoc for surrounding dealers.”

Quite the contrary, Williamson insists. Local dealers are the ones most likely to take their customers to Brooklands to test drive cars on its track or off-road course.

“This is happening more and more because we are not there to steal their customers,” Williamson adds.

“They didn’t believe it until they saw it and now they have.

They have sold cars as a result of hosting someone here.”

With 360,000 visitors in its first year, staff had to quickly learn to differentiate between people coming for the brand experience and those wanting to buy a car.

Williamson is coy on sales figures, but claims the centre is ahead of target.

He adds: “Brooklands could’ve been a white elephant, but it is a great example of us doing what we are good at – selling into our local territory.”

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