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| Mercedes-Benz E-Class Sedan / Courtesy of Mercedes-Benz Korea |
By Baek Byung-yeul
Mercedes-Benz Korea is reportedly considering a direct-to-consumer retail model similar to Tesla's, instead of selling cars to consumers through dealerships, according to industry experts, Monday.
Although the German automaker officially denied such speculation, experts said buying via online platforms could be an inevitable trend for consumers accustomed to online purchases during and since the COVID-19 pandemic.
They said Mercedes-Benz Korea recently held a meeting with its dealers to discuss introducing a direct sales system and boosting online sales. The move seems to be affected by its German headquarters, which is already increasing online sales in Europe.
The rationale is that different prices at different dealers would inconvenience consumers; reducing the number of showrooms would reduce labor costs; and given the high price of electric vehicles (EV), it would be beneficial to reduce the distribution process.
Regarding the issue, a Mercedes-Benz Korea spokesman said that the Korean unit's strategy is being discussed transparently with its dealerships and that it is difficult to share more on these issues.
"We have been having close and transparent discussions with all of our dealers about strategies to have better business with our customers and business partners in a rapidly changing car industry. We are unable to share more details about our internal business discussions," the spokesman said.
In regard to Mercedes-Benz Korea's consideration of a direct-to-consumer retail model, Lee Tae-hun, a professor at the Department of Car Business at Daekyeung University, said that the expansion of online sales is a question of when and how it might be implemented, but it has already become an industry trend.
"Mercedes-Benz Korea has already been selling certified used cars on their own online platform. As they do with used cars, they can sell new cars this way anytime. Hyundai Motor and Kia are also entering the certified car market here and are openly looking to bypass dealerships and sell cars online. It's just a matter of when and I think the expansion of online sales is the unavoidable direction of the auto sales industry, as consumers have already adapted to buying online during the pandemic," the professor said.
The professor added there will be fewer dealerships and dealers if online sales expand, but the dealers will still exist because cars are expensive products.
"There will still be a need for dealers because cars are the largest single asset outside of a home. As we are witnessing that Tesla still needs experts to explain its vehicle when their cars are delivered to customers, the role of dealers will be changed, but they won't disappear," he said.
It remains to be seen whether Mercedes-Benz Korea's strategy will work as planned. It is because the second-largest shareholder of Mercedes-Benz Korea, with a 49 percent stake, is Malaysia-based Hap Seng Group.
Hap Seng Group also holds a 20 percent stake in Mercedes-Benz Financial Services Korea, the financial arm of Mercedes-Benz Korea, and owns Han Sung Motor, the largest Mercedes-Benz dealership here and Star Motor, another local Mercedes-Benz dealership.
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