Australian dealerships thinking up new ways of doing business
The move to an agency-based model means a set price for every model, and a more efficient sales process
Mercedes-Benz and Honda making the move
Mercedes-Benz will be moving on from a franchise-based dealership model in Australia to a new business model that uses dealers as intermediaries to sell cars from the manufacturer.
Honda is planning to do the same in Australia with its dealership network starting in July 2021. Mercedes-Benz hopes the transition will be completed by January 1, 2022.
An agency-based dealership model means that dealers are a store representing a brand where prices are fixed and there’s no haggling. It’s essentially like any other store out there, selling products for a manufacturer.
Dealerships under the current model are franchises that purchase their vehicles from the manufacturer and then sell them to consumers.
Under the new model, Mercedes-Benz and Honda dealerships would simply act as the intermediary to complete the sale, taking a fixed commission on each transaction according to Australia’s CarSales.
The move has been widely condemned by Australia’s Mercedes-Benz dealerships, but the company appears to be pressing on regardless.