This long-term strategic move will deliver a win-win solution for both customers and Franchise Partners.
Mercedes-Benz India has launched its new retail sales model called 'Retail of the Future' (ROTF). With this new model, the company plans to promote a 'direct to customer' retail approach to creating a more customer-centric brand.
Under this business model, Mercedes-Benz India will own the entire stock of cars, sell them via appointed Franchise Partners, invoice the new cars to the customers directly, process the order, and fulfill them. This would also mean that the company will offer one transparent price across India. The new retail model will be applicable only for new car sales, whereas other verticals like customer service, pre-owned cars, and allied businesses will remain unchanged.
Talking about the introduction of the new retail sales model, Martin Schwenk, MD & CEO, Mercedes-Benz India, said, "This long-term strategic move will strengthen our customer focus by introducing a fundamental transition in the retail business in the market. It also will deliver a win-win solution for both customers and Franchise Partners, underscoring our clear vision for a future that is sustainable, empowering, and digital. The advent of new sales channels has brought sweeping changes in customers' aspirations and requirements, and being a customer-obsessed brand, we have adapted our current business models to meet our customers' aspirations and needs."
Commenting on Mercedes-Benz India's new retail model, Vinkesh Gulati, President, FADA India, stated, "The agency model introduced by Mercedes India will be out-of-the-box thinking by the company. Even though the model has tested waters internationally, India is a unique market where customer physic is very different as they change Dealers and even brands on any additional discount. Even though on the face of it, this model looks beneficial for the dealer community dealing in Premium Brands with low Volume but we will need to see if this model can work with mass-market brands so that every dealer can benefit from it."
Now, for customers, this might not be a big change. They will still have to visit the showroom or go online to purchase the vehicle, and, they will continue to the facilitated by the franchise representatives. However, things will be widely different for franchise partners, the dealers, who will be operating on reduced risks and liabilities right now. A direct-to-customer retail model would mean they won't have to worry about inventory cost, warehousing of the stockpile, which is added cost to dealers right now.
Mercedes-Benz India will implement its new Retail of the Future sales model starting from the fourth quarter (Q4) of the 2021 calendar year.