Mercedes Consults Network About Dealer Sell-off

Mercedes is consulting with its UK retail network about moving to an agency model for all new car sales. 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 the manufacturer was 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, the manufacturer did comment on the prospect of selling the remaining MB Retail business. In 2016 they sold their sites in the Birmingham and Manchester to Chinese group LSH Auto, 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. 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 responsibility to safeguard jobs whilst ensuring the best possible support for our customers.”

MB Retail has already informed its staff that a sell-off is on the cards. It’s understood the group will split up, not sold as a single entity and 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.