Dermot Kelly, UK passenger cars director for Mercedes-Benz, said: 'As it stood we would put our buy-backs through closed auctions and dealers would buy them, or more to the point, they wouldn't. Some of our corporate customers, in particular the leasing and rental companies, had to make substantial write-downs in the value of their used vehicles, because we didn't have direct control of used cars.
'The launch of Mercedes-Benz Direct demonstrates to the corporate market our commitment to maintaining residual values and this gives us a huge opportunity to improve corporate business.' The firm added that the decision to launch the network of used car centres came from the inability, or unwillingness, of its dealer network to win business in the sector from non-franchised outlets.
Mercedes-Benz Direct is based around six of the seven Lex Auto-sales sites in Birmingham, Bristol, Chelmsford, Hemel Hempstead, Poole and Waltham Cross, which were acquired for £17.95million on December 1 last year. Each centre will stock between 200 and 250 cars, aged between one and eight-years-old, and with up to 80,000 miles on the clock. Each car will come with a 12-month warranty conditional on the owner taking the car for servicing and repairs to a Mercedes-Benz franchised dealer.
The six centres are forecast to sell 6,000 cars in the first year rising to 10,000 by 2005. However, major growth will come from increasing the number of sites. Mercedes will open another in Croydon (the seventh site bought from Lex Autosales) by year end and is looking to establish centres in Manchester, Edinburgh, Newcastle and Leeds/Bradford.