Mercedes-Benz India has gone live with its new ‘Retail of the Future’ (ROTF) direct-to-consumer sales model. Under this business model, Mercedes-Benz India owns the entire centralized vehicle stock and will directly invoice a purchase to the buyer, in addition to handling order processing and fulfillment. India becomes the first CKD market – and only the fourth market for M-B globally after Sweden, South Africa, and Austria – to adopt ROTF.
With ROTF, Mercedes-Benz India will sell its vehicles directly to customers, with all dealers now competing to provide “the best customer experience,” in the words of Mercedes-Benz India MD and CEO Martin Schwenk. Thanks to this new model, customers will check vehicle availability across the country in real-time. They will also be able to view Mercedes-Benz India’s production pipeline for the next three months. Over 1,700 cars and SUVs have already been booked via Mercedes-Benz India’s ‘Retail of the Future’ direct-to-consumer sales model in the last three weeks.
Once a customer has made a booking by paying Rs 50,000, Mercedes-Benz India will relay the VIN of the vehicle reserved for the customer, who will have to finalize the purchase within the next two weeks, and in case they change their mind, Mercedes-Benz India will provide a full refund, no questions asked. Following full payment, Mercedes-Benz India will share the invoice with the customer within a week.
With ROTF, customers will be able to submit all the documents required for vehicle purchases online. They will also be able to view the status of their order along with the expected delivery date. Once all documents have been validated, the delivery will be completed at the dealership closest to the customer or at the buyer’s doorstep. Mercedes also promises that there will be no incidental or extra charges levied on any purchase for the first time in India.
With Mercedes-Benz India making the entire pool of cars in stock available to buyers, prospective customers will benefit from a single price for every model across the country and also have a wider variety of models and specifications to choose from, as they won’t be bound by the options available at a particular dealership. Even if the vehicle allotted to a buyer is in another city, it will be dispatched to the customer’s city as soon as one places a booking.
Additionally, Mercedes-Benz is eliminating the practice of price negotiation entirely by offering what it calls the ‘best price,’ which will be available to buyers straight from the manufacturer. Customers will also be able to easily compare model-wise prices, which will further simplify the purchase process. Buyers will still get discounts/benefits on select models, but these will now be controlled entirely by Mercedes-Benz India. Customers will be able to avail loyalty and corporate gifts wherever applicable, and these will be the same across India.
While dealers will continue to be the point of contact for customers as they will facilitate the purchase, the benefit for them, according to Mercedes, will be that they own no inventory under this business model and hence benefit from a lower cost structure and carry little market-facing risk. Mercedes-Benz India will directly compensate them for vehicle sales and continue developing local market requirements, retail marketing activities, lead generation, and managing customer relationships. There will be no change to the existing dealer infrastructure.
It’s important to note that the ROTF business model will only apply to Mercedes-Benz India’s new car business. Its pre-owned car business and other business lines will continue as before.