A majority of Mercedes-Benz dealers in Australia have banded together to file a nearly $500 million lawsuit against the automaker over its new retailing model, which gives vehicles non-negotiable prices and turns dealerships into sales agents earning fixed commissions.
Deborah O'Neill, a Labor senator representing New South Wales, said Mercedes-Benz Australia/Pacific was "piggybacking on the goodwill and hard work" of independent dealers, the Australian Financial Review reported last week.
"Make no mistake, this is a seminal moment in the history of franchising in this country," O'Neill said.
More than 80 percent of Mercedes dealers in Australia are plaintiffs in the lawsuit. The automaker said its new "agency model" complies with all relevant laws and was created in collaboration with dealers. The changes will improve transparency and "better deliver to the demands of modern consumers," it said.
"If by collaboration you mean we were told over and over again that this model was going to happen whether we liked it or not, then sure," one unidentified dealer told the Financial Review.
Said another dealer: "As a network, we repeatedly voted down the agency model on the grounds it was financially disastrous for every dealer. Previously, they had said an agency model wouldn't happen until we agreed to it. But when we learned they were forcing it anyway, that was a shock."