Mercedes-Benz switching back to regional dealer support

Mercedes-Benz is bringing back regional support for its dealers starting in 2025, three years after centralizing its retailer operations network.

Driving the news: Before 2022, Mercedes brand representatives worked with dealers in the same regional markets, allowing them to collect and share intelligence between local retailers.

• But starting that year the automaker reorganized its support network, dividing dealerships into one of three categories based on size: publicly-traded groups, multi-store groups and independent retailers.

• This meant that brand representatives worked with dealerships nationwide according to their assigned category, rather than on a regional basis.

• Starting next April, Mercedes plans to bring back its previous model of local dealer support, although it will keep some elements of its 2022 plan (such as a parts logistics team) intact.

Zooming out: The automaker’s shift away from centralized support comes after a decline in sales and profitability.

• For Q3, Mercedes reported global declines of 3% and 13% for car and van sales, respectively. Its profits slipped 65%, which the company attributed to weaker macroeconomic conditions in Asia.

Zooming in: Bringing back regional support for dealers may help Mercedes drive bigger results in the U.S.

• Local markets tend to see wildly different dynamics depending on the makeup of buyers and economic factors.

• Brand representatives who work within a confined region will likely be more available to offer localized solutions and provide relevant data to retailers in their area.

Looking ahead: At the same time, reorganizing U.S. sales operations may have a limited impact on Mercedes’ overall performance. Sales in North America were already up 29% in Q3, with the company’s global declines coming from Asia and Europe instead. While dealers in the states will likely benefit from local networks, it remains to be seen whether this will be enough to prevent losses on a worldwide scale.

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