Mercedes-Benz Malaysia to implement agency model – direct sales to consumer, fixed price across all dealers

Hap Seng’s announcement to Bursa Malaysia

Mercedes-Benz Malaysia (MBM) has started working on implementing an agency model for Mercedes-Benz dealerships in Malaysia, as evident from Hap Seng Consolidated Berhad’s announcement to Bursa Malaysia that it has signed an MOU with MBM to negotiate the new model.

The agency model has already been implemented in parts of Europe (the UK first, Germany next) and it is expected that by the end of 2023, more than half of new Mercedes-Benz models will be sold under the new agency model.

What exactly is the agency model and how does it differ from a dealership model? In Mercedes-Benz’s proposed agency model, the sales contract with the customer will be with Mercedes-Benz, and not the dealership. The dealership will only act as an agent and will be paid a fee for their sales service.

In Europe, the dealers will no longer need to keep inventories, and prices will be fixed between all dealers. This is a “move away from selling the price to selling the car, which should be the case in the premium market,” according to Ola Kallenius, Mercedes-Benz Group chief executive. How it will work in Malaysia is still being finalised.

“Modern technologies and changes in customer behaviour open up new opportunities for the distribution and sales of our vehicles and services. Hence, we continuously review our sales structures and models. With the agency model our retail partners will continue to take on a central role in the customer experience towards a seamless purchasing journey from research to the vehicle handover.

In Malaysia, Mercedes-Benz intends to introduce the agency model before the end of 2023 and are currently evaluating the possibilities together with all of our authorized Mercedes-Benz dealers in Malaysia. Further details will be announced in due time,” says Bettina Plangger, VP of sales & marketing, Mercedes-Benz Cars Malaysia.

Hap Seng Consolidated Berhad’s Hap Seng Star dealership is not the only dealership that Mercedes-Benz Malaysia is in talks with to transition to an agency model. It just so happens that Hap Seng is public listed so it has to be announced. Cycle & Carriage Bintang used to be listed on Bursa but has been delisted and taken private in September 2022.

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