Germany – Mercedes-Benz divests 15 dealerships to Chinese company image

A Chinese investor has recently opted to purchase fifteen Mercedes-Benz dealerships located in eastern Germany as the automaker strives to increase profitability and the unit of China’s Lei Shing Hong Group seeks to enter the continent’s largest auto market.

Daimler announced in a recent statement the sale of the Mercedes locations to Stern Auto, such as showrooms in Leipzig, Dresden and Rostock will affect around 1,000 employees, with the Chinese firm active in Germany since last year as it took over another Mercedes-Benz outlet in Erfurt. Lei Shing Hong is the automaker’s biggest world dealership representative and said it opted to acquire the German locations in a bid to expand its practices to cater for operations in mature markets. Germany’s traditional dealership business is not only centered around new car sales, but also draws substantial profit from offering approved used vehicles and the commercialization of spare parts. Daimler said last year it would divest 56 of the 158 dealerships it owns in Germany to interested investors – the strategy would affect around 3,000 employees out of the domestic auto-distribution workforce of 15,000.

Daimler, the Mercedes-Benz’s parent, according to the company’s chief executive officer, has pledged to lift operating profit at the crucial passenger cars unit – which includes the Smart city brand – to 10 percent return from sales in a bid to bridge the gap with its larger rivals Audi and BMW.

Via Automotive News Europe