Almost a year ago we told you about the important transformation that Mercedes will undertake in 2023. The star firm reached an agreement with European dealers to become agencies, a new sales concept. But the giant has opened an important front in Australia with a class action lawsuit on this issue.
The star brand aims to be the first brand in the world to transform its new car sales business model. A year ago we told you that the German giant had designed a new strategy in which dealers become agenciessome entities that will sell the models with a fixed price in all of them, for which reason there will be no differences in the prices of new cars between the concessions of the countries.
These agencies will act as intermediaries in the relationship between customers and the brand and receiving a commission for each unit delivered in compensation, and continuing with its usual after-sales services. In Europe, Mercedes has already signed the corresponding contracts, so this business model It will start in some European countries throughout 2023 and Spain will be added from 2024. But not all dealers are satisfied, a large part of those in Australia are clearly not, because nothing less than 38 of the 55 officers in the country have presented a class action suit for this reason of the agencies.
Mercedes bets on more transparent prices
The complainants argue that the business model was conceived in secret, despite the fact that they were consulted on this subject. And, although it is true that a large number opposed it, the firm went ahead with its transformation; in fact, 17 Australian dealers are already operating as agencies since last January, and are not part of this complaint. The dissatisfied understand that this new agency model will cause them to lose a large part of the income and profits for the establishment of a fixed price that eliminates competition between dealers and that goes much more towards online salesalso lowering the relationship with customers.
The claim addressed to Mercedes also includes a violation of the franchise regulations in Australia, for which demand more than 460 million euros in compensation for the profits that they will no longer obtain, for the investments made to adapt their facilities to the image of the star’s brand. Sources from Mercedes Australia have stated in this regard noting that “It is clear that Australian customers have adopted the new sales model, which provides our valued customers more transparent pricing, while reducing dealer delivery fees and access for all Australians to our national vehicle pool, regardless of where the customer lives.”
The dispute is complicated, since there is already a previous precedent, when those of GM decided to do without Holdenfor which the dealers sued the American giant, being sentenced to compensate the dealers for their decision to unilaterally terminate the contractual relationship causing an imbalance of power inherent between car dealers and manufacturers. A ruling used by the Australian government to introduce greater protection into the franchise code, requiring “fair and reasonable compensation to franchisees in the event of early termination.” Now, it will be the federal court that consider whether or not the transformation from dealership to agency constitutes an early termination or it is only a change in the figure and in the conditions.
Font: ABC.net.au