Fall from grace
10 September 2018 - 7:00am | Jack Carfrae
I remember speaking to Mercedes’ previous fleet boss, Nick Andrews, shortly after he took up the role. At the time, the manufacturer was canvassing fleet customers in a big way and he freely admitted, in a room full of leasing company executives, that it had been tricky to deal with in the past. It was seeking to change that, and transform itself into the UK’s best-selling premium brand in fleet. If memory serves, I’d say this was around the start of 2012.
If you count sub-25-vehicle sales, the firm realised its ambition in 2017, when it became the fourth-largest seller to fleets behind the three big mainstream brands and, crucially for Merc, just ahead of BMW.
Auto Retail Network’s Franchising Report documented this in March, along with the winter 2018 NFDA results, when Mercedes was still bang at the top (albeit joint with Kia and Toyota), a position it had held for three years. It seemed it had achieved the nirvana of serious growth while maintaining profitability and a happy network.
However, the latest survey results, published last Monday, saw Merc fall seven-places – the most of any manufacturer – much of which was credited to volume pressure.
Yes, I’m singling out Mercedes – and I’m also skimming over the fact that overall responses showed an improvement in dealers’ opinions – but I think this is a textbook example of how volume aspirations, however controlled, eventually have a negative effect. The company’s rating isn’t exactly in the doldrums, plenty of manufacturers fared much worse, but I believe its tumble from the NFDA’s top spot illustrates that you can’t have your cake and eat it.
If market share is the end game then to heck with it, bring on the discounts, the pre-reg and force it through. Just don’t kid yourself that it equals profit.
I await the next return on sales figures with interest.
Auto Retail Agenda