Australian Mercedes-Benz dealers have launched a $650 million legal action against Mercedes-Benz Germany, claiming the powerful parent company is forcing an abrupt change in business model that undermines millions of dollars in dealer investment.

More than 80 per cent of independent Mercedes dealers have combined forces to fight a decision by Mercedes Germany, and parent company Daimler, to change from a “dealership model” to an “agency model” with limited compensation, no negotiation and no ability to recoup sunk costs or future earnings.