MB changing direction to sell cars

[stubax]

When I recently visited MB Stockport the salesman dropped into conversation that the sales model for all new MB's will change on Jan 1st. The dealers will become agents for MB in that all new sales will be handled by MB UK who will set retail prices and part ex prices, presumably the dealers will receive a set commission. I have also had a communication from MB Bolton for a recent promotion that stated that the promotion would be the last chance to negotiate a discount.

 

[MikeInWimbledon]

I have also had a communication from MB Bolton for a recent promotion that stated that the promotion would be the last chance to negotiate a discount.

MRDA

 

[Teego]

When I recently visited MB Stockport the salesman dropped into conversation that the sales model for all new MB's will change on Jan 1st. The dealers will become agents for MB in that all new sales will be handled by MB UK who will set retail prices and part ex prices, presumably the dealers will receive a set commission. I have also had a communication from MB Bolton for a recent promotion that stated that the promotion would be the last chance to negotiate a discount.

I was also told this at our PL meet this summer. They had doubts about it working.
IMO it may also be against competition law for franchisees to collude on pricing.

 

[ALFAitalia]

Alfa....and no doubt others..... are going the "Agency Sales" route too. Bad news?....no more haggling....although this will be good for some as many people hate bargaining. Good news?....... Potentially stronger residuals.

 

[MikeInWimbledon]

Can't believe that this will work for big ticket consumer, or even fleet, purchases.

The assumption is that new kit will just sell, and that part ex values can be defined "rationally."

Yet we've had a century, or more, of salespeople closing deals by tailoring deals to customer needs. For cars, houses, tech kit - all kinds of stuff.

.

 

[W1ghty]

MRDA

View attachment 131775

I don’t get it buddy ?

 

[oldguy57]

When I recently visited MB Stockport the salesman dropped into conversation that the sales model for all new MB's will change on Jan 1st. The dealers will become agents for MB in that all new sales will be handled by MB UK who will set retail prices and part ex prices, presumably the dealers will receive a set commission. I have also had a communication from MB Bolton for a recent promotion that stated that the promotion would be the last chance to negotiate a discount.

I find it hard to believe that the Competition Commission will allow that.

 

[whitenemesis]

I don’t get it buddy ?

Mandy Rice-Davies Applies
"Well he would, wouldn't he" (often misquoted "Well he would say that, wouldn't he?")

Mandy Rice-Davies - Wikipedia

en.m.wikipedia.org

 

[Londonscottish]

Can't believe that this will work for big ticket consumer, or even fleet, purchases.

The assumption is that new kit will just sell, and that part ex values can be defined "rationally."

Yet we've had a century, or more, of salespeople closing deals by tailoring deals to customer needs. For cars, houses, tech kit - all kinds of stuff.

.

Yeah, I once worked for a huge tech co whose American bosses had a extremely arrogant "build it and they will come" attitude.

The reality on the ground was totally different - endless presentations, demo's, poc's, objection handling, fending off the competition, etc etc. There were a million reasons the sale wouldn't go through and all the shit was sorted at the coal face.

The Americans had no idea about any of just chose to ignore it as an inconvenient truth. Clearly, if it took us so long to sell something, either we or our buyers were stupid or, more likely we "didn't know how to sell".

Anyone half decent in the UK sales team voted with their feet and found far more rewarding jobs elsewhere.

Selling a car may be a bit more straightforward than selling enterprise software but it's still a complex, big ticket and emotive sell and is highly competitive.

Not convinced at first glance.

Although, maybe times are changing; isn't this sort of how Tesla do it? Not much consumer choice, prices set centrally, skinnied down retail operations, everything on mumflies?

 

[MikeInWimbledon]

I don’t get it buddy ?

"Well he would, wouldn't he?"

The salesman is waving a discount to close a deal.

It's quote from Mandy Rees-Davies in the Christine Keeler / Profumo trial when Lord Astor said that he had never had an affair with Mandy or even met her.

So MRDA became an acronym for cynicism about a statement due to the bias of the individual involved.

I spent long periods of time herding minicomputer salesmen, stockbrokers and management consultants, so I'm cynical about "lets ge a deal done this month because it won't be available afterwards."

Some things, like retail Teslas, may sell routinely, but not most. "We made too many black cars - we'll have to get them sold." Or "no-one's buying these last dozen run out SL63's we made and they're just sitting here..." Or "Avis want an extra discount, or timed delivery on 200 vehicles, who's going to say no to that?"

 

[190]

This fixed price no haggling approach is the inevitable result of high demand and the manufacturers inability to produce enough cars. They are all heading in that direction but one of the manufacturers is going to blink when eventually supply matches or exceeds demand. It's just a question of time. If it has to be a Mercedes you may have to wait longer because they seem to be aspiring to be another Porche, but fleets and car hire companies are going to buy whatever new make of car they can get at the best price.

 

[grober]

This is potentially bad news as the MB UK franchise has a history of restricting consumer/buyer choice with their UK products. E.g. you can have any colour as long as it's silver or black and no you can't have a V6 petrol engine has to be a four-cylinder [van ] diesel engine. Then there's the extra cost add-on electronic systems options which are often part of a showroom standard package in other countries----- then they wonder why they can't sell enough cars in comparison to their competitors.

 

[Bobby Dazzler]

I find it hard to believe that the Competition Commission will allow that.

I don’t believe the Competition and Markets Authority will be too concerned as Mercedes won’t be controlling the price of all vehicles, only the vehicles they themselves manufacture and/or import. There are more than enough vehicle manufactures and importers operating in the UK for there to be free choice in the market.

 

[Bobby Dazzler]

Whilst sometimes positioned as being different, in practice this is little different to “online” selling which has been expected within the industry and car market at large for the last 25 years.

In both the agent and online models, anufacturers will market and sell vehicles online, dealerships will service, repair, test-drive, handover and part-exchange, so pretty much the same in all but name.

Just like other recent societal shifts like working from home, online shopping, and switch to investing in renewable energy, it’s an acceleration of a long-standing expectation and (slower) natural evolution.

The traditional model of selling cars must change anyway. Whether those of us from a different time like it or not, the shift towards pay-as-you-go motoring is already happening and has been for years.

Many car buyers now “buy” a car based upon image and reputation, at price point set by a monthly finance cost, and then pay insurance, servicing, road tax monthly. The likes of Peugeot bundled these up years ago.

If you don’t like it though, don’t worry, it won’t last forever. It will evolve again as “ownership” becomes a thing of the past for a growing number of people, who will think “mobility” not “car” in future.

 

[W1ghty]

Don’t Porsche already operate a similar “the price is what it says “ sales model ?

 

[Harrythedog]

I find it hard to believe that the Competition Commission will allow that.

Apple do it and have done so for years.
I bought mine through Drive the Deal MB dealership at the other end of the country. The difference in price was nearly £8k, so are some dealers currently being too greedy ?

 

[Bobby Dazzler]

I bought mine through Drive the Deal MB dealership at the other end of the country. The difference in price was nearly £8k, so are some dealers currently being too greedy ?

Pricing according to demand and supply. Dealers are currently incentivised to hit volume targets for new car sales by receiving a “bonus” for achieving a certain volume, and so some dealers are prepared to give away their margin on the car in order to achieve the volume incentive.

 

[Bobby Dazzler]

Don’t Porsche already operate a similar “the price is what it says “ sales model ?

Sort of. They will bundle “value added” items like paint coatings without trying too hard, and will offer cash discounts in the right circumstances - especially on volume models like smaller-engined Macan and Panamera - but the values we’re talking about are small compared to Mercedes.

The last Porsche I bought was in 2020 and so was before the recent supply chain craziness. I just checked the paperwork and received a £1000 “dealer deductible” which was no better and no worse than pre-COVIID deals as their sales had remained strong during first lockdown.

A dealer deductible is what the rest of us call a discount, but of course Porsche do like to maintain the impression that they don’t discount. Just like there has never been a warranty claim on Honda VTEC variable timing components, they were all replaced as goodwill gestures!

At the other end of the scale Porsche dealers bundle models. If you don’t have a history of buying lots of Porsches then buying a new GT mode isn’t an option in the UK. A dealer may help you to get up the list by selling you a combination of volume models like Macan and Panamera.

Officially bundling volume and special models is a dealership practice - and not a Porsche or Porsche UK practice - but they must know it happens and therefore must allow it. I’ve read that Porsche frown upon it, but it still happens, so I suspect it’s frowned upon for effect rather than action.

Ferrari do the same. FF and GTC4 Lusso are exceptional cars however most UK registrations were demonstrators and to customers wishing to buy a limited edition model like a Speciale or Pista. An FF, California and a couple of “regular” V8/V12 2-seat modes are usually required.

Avoiding the “overs” - ie the significant premium applied when special models are sold secondhand by speculator first owners - costs just as much because you take a loss on each car you didn’t want to buy. However it helps with all future special models so many people take that route.

 

[alabbasi]

Law suit

 

[Dryce]

It's just a question of time.

My anecdotal experience with colleagues and friends is that none are thinking of changing cars in the short to medium term.

The impact on the market for new cars if that reflects a more widespread attitude would be reduction in demand - but also a reduction in availability of used cars (which would possibly mask that effect for a while by redirecting customers for younger used cars back to the new market).