Fleet News

Dealer warns of rising prices and poorer service

FLEETS could be facing price increases and a poorer service from Mercedes-Benz as it goes ahead with plans to reorganise its sales network in the UK, a campaigner against the proposed changes claims. The warning comes from Nick Adams, managing director of the John Tallis Mercedes-Benz dealership in Bath, as campaigning dealers prepare to take legal action against the moves.

Mercedes has also announced price rises of nearly 2% across its range, effective from April 2, making it the first manufacturer to raise prices following cuts last year. Details of the new prices will be announced soon, but Adams believes customers who have cars on order will blame dealers. He said: 'We have just sent out letters explaining that prices will be going up, but our sales staff are very concerned that customers will be unhappy.'

He claimed Mercedes was trying to recoup lost revenue following last year's price cut, but a spokesman for the manufacturer said: 'This follows a price increase in Germany in February, so it's a factory price increase and we're catching up with it in the UK.'

Mercedes-Benz has given all 159 of its dealers 12 months' notice of termination of their franchises and is expected to re-appoint around 90, while taking full control of new Mercedes-Benz Experience Centres in London, Birmingham and Manchester, giving the company control of 40% of the market. While the current dealer network will be slashed, the number of outlets will increase with smaller satellite sales and service centres replacing some dealers.

Adams said the dealers' campaign against the radical restructuring is gaining support in Parliament, and is calling for Trade and Industry Secretary Stephen Byers to refer the plans to the director-general of Fair Trading.

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