Photo: Mercedes-Benz Australia
One of the most timeless pastimes of any young adult’s life is haggling a price at a car dealership to hook themselves up with a sweet new set of wheels. If Mercedes-Benz Australia has their way, that pastime is going the way of the dodo. But not if their network of dealerships has anything to say about it.
That’s right, Mercedes-Benz is being sued in an AUD650 million legal action ($486 million) from their own dealerships. This extremely rare move was brought on by a new change in pricing for Mercedes-Benze’s Australian division that eliminates any and all forms of bargaining, haggling, or negotiating.
The big-wigs in Germany claim this action will improve the buying experience for their customers. Their dealerships argue this move is solely to put corporate higher-ups who’ve never even set foot in Australia in a better position to bend dealerships to their will. All for what's perceived to be in the name of profits and little else.
Over 80% of all Australian Mercedes-Benz dealerships have signed onto legal demands insisting Mercedes-Benz higher-ups come to the negotiating table or face very serious legal consequences. These could include, but are not limited to, substantial monetary compensation to Australian dealerships if Mercedes-Benz loses the lawsuit.
Dealerships are also worried that the new four-year contracts offered to them by the higher-ups in Germany don’t come with a formal renewal clause. This missing piece of the contract is leaving doubt about the terms of the deal in the future.
Meanwhile, the same sales tactic is being used by Honda of Australia as well. Unlike Mercedes-Benz, who appear completely devoted to their no-haggle model, Honda announced that sales in Australia are down 45% since last month's beginning of the new system.
Other brands that have played with the idea of zero-haggle sales are Genesis and Tesla, both of whom are brands that have seen meteoric rises in sales over the last decade.
Whether this model will reap the same consequences as Honda and Mercedes-Benz remain to be seen. What is known for certain is the small minority of Australian people who do wish to haggle are now essentially locked out of two of the biggest auto brands in the world.
The big-wigs in Germany claim this action will improve the buying experience for their customers. Their dealerships argue this move is solely to put corporate higher-ups who’ve never even set foot in Australia in a better position to bend dealerships to their will. All for what's perceived to be in the name of profits and little else.
Over 80% of all Australian Mercedes-Benz dealerships have signed onto legal demands insisting Mercedes-Benz higher-ups come to the negotiating table or face very serious legal consequences. These could include, but are not limited to, substantial monetary compensation to Australian dealerships if Mercedes-Benz loses the lawsuit.
Dealerships are also worried that the new four-year contracts offered to them by the higher-ups in Germany don’t come with a formal renewal clause. This missing piece of the contract is leaving doubt about the terms of the deal in the future.
Meanwhile, the same sales tactic is being used by Honda of Australia as well. Unlike Mercedes-Benz, who appear completely devoted to their no-haggle model, Honda announced that sales in Australia are down 45% since last month's beginning of the new system.
Other brands that have played with the idea of zero-haggle sales are Genesis and Tesla, both of whom are brands that have seen meteoric rises in sales over the last decade.
Whether this model will reap the same consequences as Honda and Mercedes-Benz remain to be seen. What is known for certain is the small minority of Australian people who do wish to haggle are now essentially locked out of two of the biggest auto brands in the world.
Google News