Mercedes’ zero idle inventory model to get rid of discounts
Mercedes-Benz will fix the net prices (ex-showroom) of models across India. This means, there will be no negotiations on the price.
Mercedes-Benz India is said to be planning a major revamp of its sales operations based on the ‘zero idle inventory’ model.
Under this alternative model, Mercedes-Benz will fix the net prices (ex-showroom) of models across India. This means, there will be no negotiations on the price. The company will get rid of discounts and will have periodic offers instead.
Apart from a few display and test drive cars, dealers will have zero inventory. All cars will come straight from the factory against a firm order from the customer. It will be interesting to see how these cars will be invoiced though.
Being a capital heavy business, dealerships have to pass on heavy discounts. This creates an imbalance in the market and it’s difficult to make profits in such a scenario. Having a light inventory solves this problem.
Mercedes had initially planned to introduce the new sales model in July 2021. However, it is said that the plan got pushed to September due to the second wave of the Covid-19 pandemic.
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