To soften the blow and nudge dealers to get on board with the electrification strategy, Mercedes told retailers it will offer new bonuses on sales of EVs and certified pre-owned cars.
The manufacturer has also simplified the margin structure, reducing the number of performance criteria that dealers must achieve to earn their bonus money.
“That’s the control that the manufacturer has never wanted to relinquish, Aiosa said.
“At least there’s an opportunity to offset.”
The margin clip is well timed.
Dealer profitability across the industry is soaring because of limited inventories caused by the global shortage of semiconductors and other materials.
Return on sales for Mercedes dealerships nearly doubled to 6.4 percent from 3.3 percent pre-pandemic, dealers were told at the meeting.
“Dealers are making more money than they’ve ever made in their lifetimes,” said Patrick Womack, dealer principal of Mercedes-Benz of Billings in Montana. “So if there was any time to get a margin cut pushed across the line, now is the right time.”
