Mercedes is upshifting its strategy from premium to luxury.

"We’re changing lanes," explained Tom Brennan, head of fleet sales at Mercedes-Benz UK. 

"Our ambition has changed - it's no longer volume. This move to luxury began two years ago. And the change will be clear in 2023 when we change to an agency model."

Brennan spoke to a crowded audience of fleet managers at the first Association of Fleet Professionals conference held at the British Motor Museum, Gaydon in Warwickshire. Mercedes has already signaled its intention to switch to an agency distribution model in the UK market, something also agreed with German retailers. This involves removing the ability for dealers to negotiate prices, which is made centrally. Mercedes cites price transparency as a key benefit.

"The conversation is about sustainability and luxury," continued Brennan. "We want a CO2-neutral car fleet by the next decade. The only way we are going to achieve that is with fleet customers. You are the most important customer group for us."

Brennan went on to explain that product simplification and fewer trims was important for online ordering and for fleets.

"Centralized stock and price transparency means there will be the one price for fleet, for the corporate, retail, and SME sectors. That’s the expectation of a luxury brand."

Brennan added that by 2030 it would only be selling electric cars in the UK market - the date the government has mandated for the cessation of all new petrol and diesel sales in the UK.

"It is a huge change," finished Brennan. "And it’s part of our luxury change."

Brennan was speaking the day before Mercedes chairman Ola Källenius told investors of the company's new strategy at a meeting on the Cote d’Azur, France.

“What has always been the core of our brand is now also the core of our strategy: the luxury segment. We are further sharpening the focus of our business model and product portfolio in order to maximize the potential of Mercedes-Benz even in challenging conditions. At the heart of that is our goal to build the world’s most desirable cars,” he said.

To underscore its change of strategy, earlier this year Mercedes-Benz Group strengthened its Supervisory Board with experts from the sustainability and luxury-goods industry, with the appointment of Dame Polly Courtice and Marco Gobbetti.

Further Reading: