Mercedes-Benz India announces direct to customer retail model

Mercedes-Benz has announced a drastic change in the way it operates its retail business in India with what it calls the futuristic and more customer centric ‘direct to customer’ model called ‘Retail of the Future’ (ROTF).

How it will work is that Mercedes-Benz India will own the stock of cars and sell them through franchise partners. The cars will be invoiced by the company directly, process the order and fulfil them. The result, the company said, is that the pricing will be transparent price and purchasing experience for the customers.

That apart, there will be a larger pool for selection of cars available through the franchise and customers will get the best prices directly from Mercedes-Benz India without having to negotiate, easier price comparison, seamless and simplified purchase process.

ROTF will be kick off in India from Q4 2021. The new retail model will be applicable for new car sales. Separate business lines including customer service, pre-owned cars and allied businesses will remain unchanged.

Martin Schwenk, Managing Director and CEO, Mercedes-Benz India said: “Reimagine Excellence is our motto for 2021, and a key reason for introducing Retail of the Future is to create an enhanced luxury buying experience for our customers. This long-term strategic move will strengthen our customer focus by introducing a fundamental transition in the retail business in the market.

“It also will deliver a win-win solution for both customers and franchise partners, underscoring our clear vision for a future which is sustainable, empowering and digital. The advent of new sales channel has brought sweeping changes in customers’ aspirations and requirements, and being a customer obsessed brand, we have adapted our current business models to meet our customers’ aspirations and needs,” he added.

The company said that the role of the Mercedes-Benz franchise partners will be to establish and maintain customer contacts, development of the market and facilitating the sale of cars.

“Introducing ROTF is a firm step towards establishing an ecosystem that is customer obsessed. It empowers customers to have a hassle-free and completely transparent customer journey that has never been experienced before. We are also glad to have the collaboration of our franchise partners in this transition, further empowering them to have significantly less financial and operational risks, resulting in a profitable and sustainable business model," said Schwenk.

“Franchise partners continue as brand representatives, maintaining their strong connect with customers and striving to offer the best customer experience in the market. It also allows Mercedes-Benz to stay obsessed with customers and remain a future-ready pioneering brand, ahead of the curve,” he added.