Mercedes-Benz has prevailed over dealers in Australia who wanted compensation for being forced to adopt a no-haggle "agency" business model for new-vehicle sales.
A judge dismissed a $420 million lawsuit filed against the automaker by 38 of the country's 49 Mercedes dealers. The judge ruled last week that Mercedes properly used the non-renewal option in its franchise agreements to impose the agency model, though he added that the country's franchise laws might be in need of revision.
"Automotive dealers across Australia will be very disappointed with this judgment," James Voortman, CEO of the Australian Automotive Dealers Association, said in a statement. "This will feel like a kick in the guts not only to the Mercedes dealers but to all franchised new-car dealers and, for that matter, all of Australia's franchisees."
Mercedes converted its Australian dealerships to an agency model at the start of 2022, following Honda's move to fixed prices in 2021. Last week's ruling could open the door to similar changes by other automakers.
"We welcome the court's decision," Mercedes-Benz Australia said in a statement. "Our focus continues to be on delivering luxury, high-performance cars for our valued customers around Australia."
The case went to trial in August 2022, with dealers arguing that they were bullied and threatened into using the new model, under which the automaker retains ownership of all inventory and pays a commission for each sale. Dealers presented evidence that company officials referred to them internally as "little piglets."
