Mercedes-Benz plans to cut 15 to 20 percent of its dealerships in Germany, and about 10 percent globally, as part of broad overhaul of its distribution network, executives said.
There are no plans for a U.S. dealership consolidation, the automaker said.
Mercedes is also moving toward a more direct-sales – or "agency" – model, and is targeting 80 percent of European sales through this method by 2025, with 20 markets in total, from five today.
At the same time Mercedes is targeting 25 percent online sales by 2025.
The automaker says the moves will cut distribution costs and allow it to rein in incentives as the automaker seeks to move even farther upmarket with higher average selling prices.
"We want to have more proximity to the customer and therefore have better control over pricing," CFO Harald Wilhelm said last week at Mercedes' capital markets day. "That's why we are moving from the current dealer role."
The cuts in Mercedes' global dealer footprint will take place by 2025, with the German dealership reduction in place by 2028, said Bettina Fetzer, vice president communications and marketing.
"We need fewer large showrooms in mature markets," she said, while noting that Mercedes is adding showrooms in China. "We will move away from large showrooms, especially when we move to direct sales."
That's not the case in the U.S. market.
“We are committed to support our existing franchise model together with our dealer partners," Robert Moran, director of corporate communications for Mercedes-Benz USA, said in an emailed statement on Monday. "Despite the growing number of changes in trends and direct sales in other markets (agent model; model D in Europe etc.), our franchised dealers will continue to play a central role in managing the transaction and sale of vehicles with our customers in offline and online transactions.”