Mercedes-Benz’s New Sales Strategy: End Times For Car Dealerships?

Belinda Oliveri, managing director of Mercedes-Benz Starlight, reflected on the events of the past couple of years. At a 2021 meeting of its fifty-two Australian dealers, Mercedes-Benz Australia/Pacific Pty Ltd announced a new sales model through which customers would buy vehicles at a fixed price directly from the company and only step inside a dealership to collect their purchase. Oliveri knew that as a respected industry leader and significant player in Australia’s high-volume automotive business landscape, she had to develop an informed opinion on the matter. She also knew change was coming, but that there were also a lot of unanswered questions. Would the change be a good one? How would it affect customers? Should she support it or oppose it by joining the $650 million lawsuit 80 per cent of dealers filed against Mercedes-Benz Australia/Pacific?

LEARNING OBJECTIVES
This case is suitable for both undergraduate- and postgraduate-level students in marketing, consumer behaviour, strategic marketing, branding, distribution, and retailing. It works just as well in an MBA, executive MBA, or executive education program.

After completing this case, students will be able to do the following:
- Understand the evolution of a luxury brand in the Australian market.
- Understand the evolution of the Mercedes-Benz customer and how the traditional dealership model creates value.
- Understand the need for an alternate distribution model.
- Understand the implications of innovation and change in a distribution model.