Australian Mercedes-Benz dealers have launched legal action against the German auto giant, seeking to block major changes to their operations.
The Australian Automotive Dealers Association reports that 80 percent of the company’s dealers have joined the action related to the proposed introduction of new contractual agreements.
The changes shift dealerships from independent, self-managed companies with their own inventory to agents or dealers, which Mercedes-Benz Asia Pacific says will provide more price transparency and more choice for its customers.
He intends to defend his position “vigorously”.
AADA chief executive James Voortman said the new agreements had major long-term implications for the auto industry, the Australian franchise industry in general and consumers.
“At the heart of this industry are Australian family businesses that have developed their businesses in some cases over generations with Australian ingenuity and hard work,” he said.
“The dealer network has invested hundreds of millions of dollars in growing their business, but that value has been taken away with the stroke of a pen.
“It is also bad news for Australian consumers who will pay more for cars, see less competition and will no longer be able to look for the best deal,” he said.
In a statement, Mercedes-Benz Australia said the company had worked with the dealer network for the past three years before the launch of the Mercedes-Benz agency model, which “will better meet the demands of modern consumers.” .
“It will provide greater price transparency, better choice and greater availability of models for all customers,” he said.
“It is disappointing that some dealers have taken this step, but we believe the Mercedes-Benz dealership model complies with all relevant Australian laws and will vigorously defend our position.
Mercedes-Benz’s move is similar to changes recently implemented by Honda, which reduced the number of its outlets across the country.
Honda’s sales have fallen 38.5% so far this year, although it has focused its efforts in the Australian market on a smaller number of models.
During the same period, sales of Mercedes-Benz cars increased by 5.4%.
In their action, the dealers claim that the changes reduce the value of their businesses’ goodwill by a collective amount of $ 650 million.
Mr Voortman said that if the company was successful in forcing the changes, without paying appropriate compensation for lost business, it would set a dangerous precedent for other global franchises.
“The decision to launch this legal action was a last resort for the dealers,” he said.
Associated Australian Press