Mercedes-Benz Malaysia to implement agency model – direct sales to consumer, "dealer" earns commission –

Hap Seng’s announcement to Bursa Malaysia

Mercedes-Benz Malaysia has started working on implementing an agency model for Mercedes-Benz dealerships in Malaysia, as evident from Hap Seng Consolidated Berhad’s announcement to Bursa Malaysia that it has signed an MOU with Mercedes-Benz Malaysia to negotiate the new model.

According to Mercedes-Benz, the agency model has already been implemented in Europe and it is expected that by the end of 2023, more than half of new Mercedes-Benz models will be sold under the new agency model.

What exactly is the agency model and how does it differ from a dealership model? In Mercedes-Benz’s proposed agency model, the sales contract with the customer will be with Mercedes-Benz, and not the dealership. The dealership will only act as an agent and will be paid a commission for their sales service.

According to Mercedes-Benz, this will allow a smoother transition to online sales, and it will allow better control of transacted prices.

Hap Seng Consolidated Berhad’s Hap Seng Star dealership is not the only dealership that Mercedes-Benz Malaysia is in talks with to transition to an agency model. It just so happens that Hap Seng is public listed so it has to be announced. Cycle & Carriage Bintang used to be listed on Bursa but has been delisted and taken private in September 2022.

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