Mercedes-Benz signs up local car dealers to fixed pricing

Mercedes-Benz has leapt ahead of the competition to sign up all its car dealers in Australia to a fixed-price model.

Australia’s Mercedes Benz dealers now sell to a set price. Picture: Getty Images

German luxury car giant Mercedes-Benz has leapt ahead of the competition to sign up all its car dealers in Australia to a fixed-price model that will remove the art of haggling for a discount at car yards and provide greater transparency and equity in pricing across Australia.

Following months of work on the new pricing model, all 53 car dealers have signed up to Mercedes-Benz’s fixed-price deal, an agency sales model, despite major pressure from the car dealer networks and the Australian Automotive Dealers Association to try and kill the move.

A spokesman for the company said: “Mercedes-Benz Cars Australia will soon move forward to an agency model with the continued aim of delivering the best possible experience for all Mercedes-Benz Cars customers, both new and established.

“We are pleased that all existing Mercedes-Benz Cars retail partners in Australia have reconfirmed their commitment to the brand under the new agency model, and will join us in launching the next exciting chapter of the company’s history, starting January 2022.”

The new pricing model has caused huge infighting and controversy within the car dealership and carmakers industries.

The fixed price model means a car, no matter if it is sold in a city dealership or in the country, will have a set price that eliminates the need for haggling, negotiating and posturing by both car dealers and shoppers. For those shoppers unskilled in haggling, or just not confident to fight for a better price than that advertised, it removes the chances they will miss out on a good deal. However, car dealers often rely on haggling and negotiation to attract customers, do deals and shift cars off their lot.

Many dealers had been looking for government regulation to protect their sales model.

In July, Mercedes-Benz board member and businesswoman Britta Seeger spruiked the advantages of a shift from the franchise model to a fixed price agency structure in Australia, dubbing it “the future model of doing business in automotive”.

Federal Chamber of Automotive Industries chief executive Tony Weber told The Australian there was nothing remarkable about the fixed price and agency model, it has been the norm overseas for decades and was a key to innovation and an evolving modern economy.

“It just amazes me this discussion, to be frank, that this is something remarkable – this is not.

“The agency model is used right around the world in the automotive sector, it has been used in other parts of the world for at least two decades including New Zealand and is used by other sectors of the Australian economy quite widely.

“All it means if you go to a suburban or city dealership, or you go to a country dealership, you pay the same price at that same point of time. There is a lot of mischief about this and it is pretty childish.”