Franchised Dealers – No More Deals!

Franchised Dealers – No More Deals!
8th August 2023 Team CSF

Franchised Dealers – No More Deals!

The way we, as the public, buy new cars in the UK is changing. In January this year Mercedes-Benz UK Ltd moved from the traditional franchised dealer to an agency model. This means that rather than being supplied vehicles at a wholesale rate, adding the manufacturers recommended margin and selling to us, the buyer, they will instead just be the handover agent to their customers for cars which have been purchased directly from the manufacturer. In return they will receive a fee / commission for facilitating the sale.

If we are to believe the PR that Mercedes Benz has published on the topic, the rationale behind the switch in this model is solely for the benefit of us, the consumer. Apparently, we no longer need to go through the drudgery of haggling with dealers now that prices are supposedly transparent and fixed. Additionally, due to the non-negotiable nature, we are told, regional car registrations are up meaning that buyers are no longer traveling to a faraway dealer in search of a better deal. When a main dealer is commoditised and the service is identikit, why travel?

Personally, and drawing on my many years in the industry, I am a little more sceptical of their motivations. If the move was truly consumer focused, there are other ways to achieve the same end result without changing the model that has underpinned the industry for so long. Discouraging (as far as they legally can) discounting, as Porsche have done for many years creates the same ‘no haggle’ environment which in turn negates the need to travel and encourages dealing locally.

Rather, I feel that the move is instead designed to benefit Mercedes-Benz. It allows them to engage directly with customers, control how much of the value chain the dealer receives and allows them to create a quasi-direct-to-consumer model via the back door. This, in turn, removes one of the strategic advantages of the Tesla operating model – a manufacturer owned retail network.

It is true that not all consumers enjoy the car buying experience. Whether it be taking time to view a misdescribed car, or negotiating with inexperienced salesmen on the purchase, there are elements of the process which can seem like hard work. We recognised this years ago developing our own solution which utilises years of knowledge and relationships in the form of our approved dealer partner network, albeit for the specialist high end used car sector.

We actively work with our customers and dealers to deliver the same trouble-free and seamless buying experience that Mercedes-Benz is trying to create, at no charge to you. You can be as involved, or not ,as you choose. Either way, we endeavour to deliver value and competitive transactions from our carefully selected trusted partners.

From sourcing, to viewings, inspections and negotiating we are committed to working with our clients to ensure that the buying process is smooth and trouble free. We are currently working on searches that range from a £45,000 Porsche 997 to a £1.2 million Vintage Bentley Speed Six. Our experience is gained through the diversity of our operation over many years.

I like to think that our expertise and enthusiasm for the sector is what makes us different. So, if you are thinking of making a new addition to a collection, or indeed making space for something new, we are here to support you as we always have been. There is no shortcut to experience and we recognise that the journey to buying a car should be as satisfying as the actual ownership.