MERCEDES-Benz has announced a new retail strategy which could see it ditch nearly half of its existing car dealers. The company, which began 2001 with record orders in the UK, has developed a new sales network, including Mercedes-Benz Experience Centres, in the metropolitan areas of London, Birmingham and Manchester.

These will be owned by the manufacturer and supplemented by a network of Market Area Concepts (MACs) each featuring main dealers, satellites, service stations and high street retail outlets. The new main dealers will meet all customer needs, but there will also be satellite sales or service centres, and shops for customers who know which model they want and who do not need a test drive. Although the number of Mercedes-Benz outlets will increase from 159 to 175, current dealers will lose their franchises, with sales and servicing of Mercedes-Benz cars ending before the reorganisation is completed.

Dermot Kelly, director of Mercedes-Benz cars in the UK, promised fleets a better deal from the new system. He said: 'Every one of the new territories will have a dedicated corporate sales area and there will be a greater focus on the corporate marketplace.' Kelly denied the move was prompted by proposed changes to the Block Exemption due in September 2002, saying Mercedes-Benz was adapting to the shift in the way people buy cars.

Dealers met at Birmingham's National Motorcycle Museum on January 16 to discuss their next move, and whether to seek up to £250 million in compensation from Mercedes-Benz for lost earnings. Alan Pulham, franchised dealer director for the Retail Motor Industry Federation, said: 'I totally deplore the actions and treatment that Mercedes-Benz has foisted upon the dealer network.' Mercedes-Benz dealers have signed a confidentiality agreement banning them from discussing the reorganisation publicly, but they have been venting their anger anonymously on www.mbdealers-speak.com.