New MB pricing

[leef44]

For me electrics seats are favourable. I have a weak back and on a long journey its nice to switch the memory setting from one to another to change the position for my back.

 

[Bobby Dazzler]

Memory seats are one of those things that you can’t see the point of until you have them, and then take for granted until you don’t!

 

[Benz17]

Memory seats are one of those things that you can’t see the point of until you have them, and then take for granted until you don’t!

Yep the old saying, sometime what you don’t have you don’t miss, but what you had you do.

 

[uumode]

On my car the pre-safe system automatically moves the seat to a more favourable brace position, as well as tensioning seat belts, close windows/sunroof etc though like a fire extinguisher you hope you'll never have to use it that often.

For everyday though, it's just handy like electric windows. The car doesn't have to have these either, most folks in the 80's were fine with winders. I have a partner who uses the car so memory positions is useful, if only it did the rear view mirror

 

[NewbieAMG]

was considering an approved used c43 and dealer is saying that mercedes sets the prices for second hand cars too. am I being given a load of non-sense?

 

[Dryce]

was considering an approved used c43 and dealer is saying that mercedes sets the prices for second hand cars too. am I being given a load of non-sense?

Last time I actively looked to buy an AU MB a few years ago the dealer said the sticker prices were non-negotiable - it was the dealer group's policy.

MB are changing to an agency model for dealers - this would allow them to impose pricing policy if the agency model covers the approved used cars as well.

 

[st13phil]

MB are changing to an agency model for dealers - this would allow them to impose pricing policy if the agency model covers the approved used cars as well.

Hmm...

I'm even less convinced that the "fixed price" model will work for used cars than I am that it will work for new.

For new cars the buyer's only alternative is to buy another brand - which I suspect will increasingly happen as MBUK's list prices are uncompetitive with the deal price that can be struck on BMW, Audi, Lexus, etc.

For used cars the buyer can simply purchase outside the franchise network. MBUK can't control the used prices outside their franchise so they're stuffed in that respect, but also in terms of valuation for "wear and tear" and any other minor defects on a used car.

 

[Dryce]

Hmm...

I'm even less convinced that the "fixed price" model will work for used cars than I am that it will work for new.

Depends on the market.

With a relative shortage of new cars and cars under 3 years old and a finance arm that is looking to keep customers on monthlies then it makes perfect sense for the manufacturers with a good base of lease and PCP customers to try and control the market more. In terms of yield per customer and yield per vehicle there is a huge attraction in moving down this route.

The ultimate goal is basically to turn all customers into long term subscribers.

So you get your new flashy Van Der Graf K24 Pro Max compact car just launched on a deal at £399 per month. Stocks of last years K23 Pro are available for £349. You can get a renewed 1 year old K23 Pro at £299 and a 3 year old K21 Xmax is £249. Your kids will tell you to avoid the K21 because it's on K-OS 3.5 and can't be upgraded to new K-OS 4 which means after the end of 2023 the that TitsUp and Twatter social media software won't work hands free because it won't support older version of K-OS. Another factor against the K21 is the much anticipated K-AUTIC advanced parentfree school run pack that supports driving the kids to school and dropping them off with no driver on board is to be released in 2024 will need K-OS 4 - and the enhanced parentfree school pick up version with child aroma recognition is rumoured to need at least a K22.

I'm fairly cynical about software subscriptions. (Finance person at our company has pointed out that Sage is now costing about 5 times more on an equivalent annual basis than it did before he switched to subscription pricing - and apart from Making tax Digital which is a regulatory requirement hasn't added much tangible value from his perspective).

Car manufacturers like MB and BMW have made PCPs and lease deals the norm - using their own finance arms to close the loop. So they probably feel they are part way there. The shift to EVs and changes in the relationship with maintenance and the soft technical features mean that large car makers with strong brands likely see an opportunity to get more complete control over their ecosystem and customers.

 

[Scooby_Doo]

One major problem with the new MB system is the popularity of WBAC , Motorway etc. Sites like Drivethedeal offer discounts on a limited number of manufacturers ( MB no longer listed) and taking the discount and passing on your p/ex to WBAC ( albeit less than dealer p/ex price) is so easy these days. If MB are bullish about new car prices I wonder how they're p/ex prices are fixed.
When I bought my C207 back in 2016 , selling my 2013 C207 to WBAC and negotiating a deal via Carwow I saved about £8500 over a straight p/ex deal with my local dealer. Appreciate current supply problems are a factor but when I recently enquired about changing my W205 to a W206 the p/ex price was less than WBAC's offer.
No longer have an MB .

 

[ALFAitalia]

I'm sorry but I woukld NEVER buy a new car from any manufacturer that controls the prices to that degree out of principle.....its 100% profiteering and all about eliminating discount. If I spoke to all the other caravan dealers that I know and we all agree to not do any discount on new Swift models that would be whats commonly called BLOODY ILLEGAL! But put all the dealers under your direct control and call it agency model....and that all fine and dandy....well its not in my book. If I was in the market for a new car...no way it would be a Merc under the current arrangement....
They cant control used cars prices, because as said above, there are thousands of them outside the main dealer network.....so if they are too expensive they wont sell....well except to the gullible who believe Mercedes Approved are actually any better than the same used car bought elsewhere......there are people who will only buy parts from the Mercedes parts counter.....so there is a ready sea of the gullible to keep them going i guess!!!
I hope they lose market share to other brands....then they might realise that "avin' a deal" is all part of the car buying process and part of what makes it different to buying a TV (mind you I got a discount on mine so not a good example!) or any other fixed price item.

 

[Dryce]

I'm sorry but I woukld NEVER buy a new car from any manufacturer that controls the prices to that degree out of principle.....its 100% profiteering and all about eliminating discount.

And yet Apple seem to manage to hold pricing - and are very popular. Car manufacturers and dealers seem to be able to offer 'deposit contributions' or other finance related discount scams.

Not so long ago we used have people buying cars from continental Europe because the UK and non-UK manufacturers all seemed to be able to connive to hold UK prices at a higher level.

And then we have spec games. Where you can buy a car in the UK but only at a higher spec than what would be on offer in other markets. So the prices are higher because they won't offer cheaper variants.

 

[190]

MB and any others that follow, have seen an opportunity in the supply shortage caused by the pandemic. They have seen a way to substantially increase profit margins and are taking advantage of it. Good business sense I suppose, but for excessive prices to last indefinitely, all of the other car manufacturers would have to follow suit. Either that or MB intend to make fewer cars but with bigger profit margins. Other manufacturers may adopt the same sales model but with more reasonable prices. Some manufacturers are bound to see that undercutting the high price fixers will increase their market share. I'm not precious about having another Mercedes, Like most people I'll buy whatever does the job at a reasonable price. It seems to me that MB have the intention to move further upmarket and won't respond to a loss of customers as long as they are making sufficient profit.

 

[Bobby Dazzler]

I hope they lose market share to other brands....

Most brands (including Alfa Romeo) are making the switch to agency sales, and once it reaches critical mass then the rat will too, so it may need to be a boycott of new cars than just Mercedes models.

 

[ALFAitalia]

Luckily (!)....it wont be an issue for me as I don't do finance (now finished mortgage aside) so it's always used for me. To be honest even if I had the sort of cash to buy brand new cars I don't think I would.....so few of the current generation of soulless, cookie cutter cars have and appeal to me at all.

 

[Dryce]

MB and any others that follow, have seen an opportunity in the supply shortage caused by the pandemic. They have seen a way to substantially increase profit margins and are taking advantage of it. Good business sense I suppose, but for excessive prices to last indefinitely, all of the other car manufacturers would have to follow suit.

The overall profits are impacted by volume. Amortisation of development costs and marketing and selling. MB volumes are down by about 15 to 20% after the pandemic.

The telling point will be the overall levels of corporate profit - if they are higher despite the lower volumes then this is 'good business'. If they are lower then that suggests it's not just about opportunity to raise prices but the corporate need to ensure overall profits and ongoing forward investment.

Even without the pandemic and the attack on Ukraine there are other underlying pressures on the whole sector because of the extreme demands on changing products to meet new regulations.

 

[Germgh0st]

Hmm...

I'm even less convinced that the "fixed price" model will work for used cars than I am that it will work for new.

For new cars the buyer's only alternative is to buy another brand - which I suspect will increasingly happen as MBUK's list prices are uncompetitive with the deal price that can be struck on BMW, Audi, Lexus, etc.

For used cars the buyer can simply purchase outside the franchise network. MBUK can't control the used prices outside their franchise so they're stuffed in that respect, but also in terms of valuation for "wear and tear" and any other minor defects on a used car.

Which is exactly what I did - went to BMW and negotiated a £7k discount. Unless getting a bargain isn't up there on your list of priorities and you can afford to pay extra just to get the brand that you want then I think MB are going to start losing out to this new policy of theirs.

 

[Bobby Dazzler]

Which is exactly what I did - went to BMW and negotiated a £7k discount. Unless getting a bargain isn't up there on your list of priorities and you can afford to pay extra just to get the brand that you want then I think MB are going to start losing out to this new policy of theirs.

Make the most of it whilst you can as BMW are switching to agency sales across Europe too. In the UK specifically, MINI will be first in 2024 and BMW will follow in 2026.

 

[Bobby Dazzler]

The agency sales model and direct sales by the manufacturer aren’t a Mercedes UK thing, nor is it a new thing. It’s an industry thing and a global thing, and it has been in the making for many years.

The pandemic hasn’t caused it, but like the demise of the high street, working from home, and other things, the pandemic has accelerated a change that would have happened anyway.

 

[Germgh0st]

Make the most of it whilst you can as BMW are switching to agency sales across Europe too. In the UK specifically, MINI will be first in 2024 and BMW will follow in 2026.

I would hope by that time the semi-conductor and logistics issues would be resolved and dealers would have more ex-demo cars for sale, which is what I really wanted rather than new. Then it's just a matter of shopping about, always a deal to be done on secondhand cars no matter what the policy.

 

[ALFAitalia]

The agency sales model and direct sales by the manufacturer aren’t a Mercedes UK thing, nor is it a new thing. It’s an industry thing and a global thing, and it has been in the making for many years.

The pandemic hasn’t caused it, but like the demise of the high street, working from home, and other things, the pandemic has accelerated a change that would have happened anyway.

Not really.....until quite recently all car dealerships i knew were a franchise situation where the dealers can sell the cars for what they want and make as little or as much as they want ....which is very different from the agency sales setup.