Mercedes-Benz has announced today that it will be launching a new ‘direct to customer’ sales model in India, dubbed Retail of the Future (ROTF). This new model aims to increase transparency between the luxury carmaker and its customers, as well as aid Mercedes-Benz's franchise partners.
- Mercedes-Benz will now own the entire stock of vehicles
- Sales model will only be applicable on the new car sales business
- Customers will purchase their cars directly from Mercedes
- Dealers can now have zero inventory and face reduced risks
- It plans to implement ROFT across India by Q4 2021
Mercedes ROTF sales model: what is it?
In essence, with this new sales model, Mercedes will own the entire stock of its cars and sell them directly to the customer through its showrooms and online sales portal. This differs from the current sales model, where dealers purchase stock from Mercedes and then sell it to the customers. The German luxury carmaker has stated that this new model will be implemented across India by the end (fourth quarter) of this year.
This new sales model will affect both, the customers and dealers in different ways. We have compiled the changes each will face, below.
Changes for Mercedes-Benz customers
The most notable change for customers will be that they will be that they will be purchasing the car from Mercedes-Benz, which means their cars will be invoiced directly from the carmaker and not the dealers. This will also mean that all customers across India, will be offered the same prices, negating the need to negotiate with dealers to match one another's prices. They will also have access to a considerably larger pool of cars to select from, as Mercedes will own its entire stock of cars. The sales and delivery of the cars, however, will still be facilitated by the local dealers to increase the convenience factor for customers.
Changes for Mercedes-Benz dealers
For the dealers, the biggest benefit will be the fact that they don’t need to purchase and stock models, while at the same time they get to offer customers a larger variety of models and specifications. This, in turn, also reduces the amount of risk taken by the dealers, especially in the current times when lockdowns prevent them from moving their stock.
Although, these benefits are also accompanied by a slight change in their role, as their primary responsibility now becomes the establishment, maintenance and growth of relationships with customers, as well as enabling and simplifying the process of sales and delivery of Mercedes cars. They will also continue to conduct local marketing activities and initiatives.
Impact of ROTF on other Mercedes dealer services
This new sales model will only be applicable to the sale of new cars and will not change the functioning of the other sections of the business, such as customer services, pre-owned cars and accessories business.
Mercedes-Benz India plans
The luxury carmaker has recently launched the new, second-gen GLA SUV, A-Class Limousine and updated E-Class in India. It also has a number of other models slated to launch in the country over the course of the year, such as the new S-Class followed by the Maybach S 580, and also the track-focused AMG GT Black Series.
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