Mercedes-Benz is transforming its product focus — going all-electric and further upmarket. But the luxury brand is also rethinking how it supports its U.S. retail network.
At a national dealer meeting in Dallas on Thursday, Mercedes-Benz USA CEO Dimitris Psillakis revealed plans to restructure dealer operations.
Mercedes will split its 383 U.S. dealers into three groups — Air, Land and Sea — based on throughput. Each group will be assigned Mercedes sales, aftermarket and service teams.
The Air group will include large, publicly-traded dealers who account for 25 percent of the brand's sales volume. The Land group has regional multi-point retailers that generate about 40 percent of sales. Smaller, single-point stores fall into the Sea group.
Psillakis said the new arrangement better aligns corporate support around dealer needs versus the current "one-size-fits-all" structure, which spreads field operations across three geographic markets.
Publicly traded dealer groups with stores across the country have different business goals and operating structures than single rooftop retailers.
"It's about right-sizing the [field] support to the structure and needs of each dealer group," Psillakis told Automotive News ahead of the meeting. "How can we make sure that the dealers receive the information and guidance they need, and how do we do that in the fastest and most efficient way."
The restructuring of dealer operations is a nod to the consolidation in the auto retail industry.
It allows Mercedes to be more attentive to higher-volume stores, said Erin Kerrigan, managing director of Kerrigan Advisors.
"Volume per dealership is one of the biggest drivers of value," Kerrigan said. "For OEMs, it is less expensive to have higher-volume dealerships and fewer [stores]."