Daimler Might Sell German Dealerships to Cut Costs image

Daimler might sell four Mercedes-Benz dealerships located in Germany to be able to cut costs and close a profitability gap with Audi and BMW.

An anonymous source said that if these transactions will be successful the automaker might consider a bigger sell-off. While BMW and Audi rely on franchises led by private entrepreneurs to sell their vehicles, Mercedes depends on its unprofitable dealerships owned by the company. Daimler has 98 Mercedes dealerships, accounting for half of the automaker’s vehicle sales in Germany, while BMW has 43 dealerships which account for about a quarter of its sales and Audi has 16 dealerships which account for less than 10%.

“Management wants to try this out to see exactly how it would work in practice,” said the person, who asked not to be named. “They are gathering experience that could serve as a blueprint,” he said, adding “Zetsche is no fan of own retail.”

It is said that Daimler is already in talks to sell four of its German dealerships to franchise holders, two showrooms being located in the northern part of the country ad the other two in the west side. Selling more dealerships, means cutting costs for retail staff, vacation pay, corporate pensions, Christmas bonuses and profit share.

“Our own retail showrooms naturally have to be competitive when benchmarked against franchise dealers,” Daimler said in an e-mailed statement, adding this had become “ever more challenging” in its weakening domestic market. “There is currently no final concept for restructuring the group’s own retail network in Germany but different options are still being evaluated.”

Source: Auto News