Demand exceeds supply for Mercedes all-new S-Class

New Sales Company:

Group Dealership Coverage - Better Management of Dealers

Li Hongpeng, senior executive vice-president of Beijing Mercedes-Benz Sales Service Co Ltd. [Photo provided to chinadaily.com.cn]

Question: How is the current operation of Beijing Mercedes-Benz Sales Service Co after running now for over six months? And how is the sales performance of the locally-produced and imported cars?

Li Hongpeng (senior executive vice-president of Beijing Mercedes-Benz Sales Service Co Ltd): The three pillar models, E-Class, C-Class, and S-Class all have to achieve success in the market. Of course, now the fastest growing segment is SUVs, including the locally-produced GLK, imported ML-Class, and other SUV models.

BMBS has met monthly sales targets from March to October, and even more than that. The sales volume in September even witnessed a growth of 26 percent over the same period last year.

Question: How many dealers are there currently?

Li: At present, 293 Mercedes-Benz dealership outlets are in operation. As a whole they have been making profits since the second half of this year. That means most dealers have started to make profits, excluding rebates at the end of the year. Mercedes-Benz' dealership network development plan reaches beyond 2015.

Question: What's the strategic plan for the network development of Mercedes-Benz?

Li: As currently planned, we will expand the business model of group dealership coverage. At present, group dealership coverage is 70 percent and will be 80 percent in the future. The advantage of group management is that it is better at bringing the dealership group and the carmaker to reach a consensus that will be implemented in every outlet, to achieve a more streamlined management.

Duan Jianjun, executive vice-president of Sales & Marketing, Beijing Mercedes-Benz Sales Service Co Ltd.

Question: The new S-Class has now been available for a month. According to feedback from dealers, the demand for the model exceeds supply, and some dealers even sell it at a higher price than the suggested retail price. Is this the case all over China?

Duan Jianjun (executive vice-president of Sales & Marketing, Beijing Mercedes-Benz Sales Service Co Ltd): In respecting official regulations, we have no right to interfere with the final price charged by dealers. For us, we have always objected to the practice of over-charging due to the fact that it actually damages the credibility and influence of the brand as well as having a bad impact on customer satisfaction. I believe that with an ever maturing market, the practice will be less and less acceptable, to both customers and carmakers.

Question: How many S-Class products were allocated for China each month?

Duan: The S-Class sales volume in China is 20,000 to 30,000 units annually, and thus around 2,000 to 3,000 monthly. The sales volume of S-Class models contributes 50 percent to its entire sales worldwide. However, this does not mean that we can get this proportion when a car has just been launched; neither can we access 50 percent of the global supply after the S-Class is launched globally.