20 May 2021

Mercedes is consulting with its UK retail network about moving to an agency model for all new car sales, according to several retailers who spoke to Auto Retail Agenda this week. At the same time the brand is also looking to sell its own Mercedes-Benz Retail Group which operates nine sites around London.

The move to sell off the London sites comes as retailers informed Auto Retail Agenda the manufacturer was, once again, looking at switching from a franchised model for retail new car sales to an agency approach.

Mercedes originally investigated an agency model several years ago but backed away from the idea after push-back from the network. Since then, several other brands have muted the idea of moving to an agency model including Volkswagen and Cupra.

When asked about the timing of the agency consultation a spokesperson for Mercedes declined to comment.

However, Mercedes did comment on the prospect of selling the remaining MB Retail business. The manufacturer sold off its sites in the Birmingham and Manchester market areas to Chinese group LSH Auto in 2016 leaving London as the only manufacturer-owned area.

Commenting on the sale of the London operation, a spokesperson for Mercedes said: “Mercedes-Benz has refocused its strategy and taken action on structural costs, targeting strong and sustained profitability. As a result, the company is transforming its own retail business for Mercedes-Benz Cars and Vans and is therefore assessing a potential divestment of Mercedes-Benz Retail Group in the UK. In the search for buyers, high priority is placed on their long-term economic success and the continuation of the Mercedes-Benz operations. In doing so, we are fulfilling our social responsibility to safeguard jobs and ensure the best possible support for our customers.”

Auto Retail Agenda sources said MB Retail has already informed its staff that a sell-off is on the cards. It is understood the group is to be split up, rather than be sold as a single entity and that negotiations were at an early stage.

It is believed the individual dealerships will be go to existing Mercedes-Benz franchise holders. Surrounding market area operators include Vertu, Jardine and Sandown.

Tags: agency agreement, Cupra, Mercedes, Mercedes-Benz Retail Group, Volkswagen