Mercedes-Benz to sell off dealerships

MERCEDES-BENZ Australia Pacific (MBAP) is putting three of its four company-owned dealerships up for sale in a major change of direction for its retail operations.

Mercedes-Benz Sydney, Mercedes-Benz Brisbane and Mercedes-Benz Toorak – three of the biggest Benz dealerships in Australia's three biggest markets – will be offered to independent operators in a sale that is expected to return tens of millions of dollars to company coffers.

Staff at the dealerships were told of the decision to sell by Mercedes Car Group managing director Horst Von Sanden in the past week or so. The employees were apparently assured no one would be disadvantaged by the move.

All three dealerships will be sold as an integral part of the Mercedes retail network, which is running at record high sales volumes this year.

MBAP has decided to keep one of its company-owned stores – Mercedes-Benz Melbourne – to retain a toe in the Australian retail market.

The sale of the three businesses was confirmed to GoAuto by MBAP public relations, product and corporate communications senior manager David McCarthy who said the company had received a lot of interest from prospective buyers.

“We have had a very successful history with retail,” he said. “The reality is there is always very strong demand for Mercedes-Benz retail franchises.

“Our independent franchise dealers do a fantastic job, and there is a lot of interest in those other facilities.

“But we want to keep close to retail, because it allows us to test different sales concepts, it provides a benchmark and it enables us to maintain that proximity to the market, so you can watch what's going on in the market, so you have first-hand experience.

“But you don't need four sites to do that. So, we are going to keep Melbourne.” Mr McCarthy said the company had decided to keep Mercedes-Benz Melbourne because it was close to MBAP's Mulgrave headquarters in Victoria and thus the most convenient to manage.

He said he was unable to say if the decision to sell the dealerships was local or from company headquarters in Germany, as he had not been party to it.

He also would not speculate on the prices the dealerships would realise on the Australian market.

Of the three dealerships to be sold, the Sydney operation in O'Riordon St, Alexandria – between the CBD and Sydney Airport – is arguably the jewel in the crown.

Left: Mercedes-Benz Australia managing director Horst von Sanden. It not only serves Sydney's downtown area but also the eastern suburbs, and includes an airport express service centre.

Mercedes-Benz Brisbane is in Fortitude Valley – an area well populated by prestige car dealerships.

Mercedes-Benz Toorak is the smallest of the three up for sale, with a showroom tucked in the Trak Village area of Melbourne's wealthiest neighbourhood.

The dealership – formerly Worrell's before MBAP took it over – has served Melbourne's elite since 1921.

It was recently refurbished by MBAP, which added a separate service centre across the Yarra River in Burnley, conveniently over the road from a busy railway station with quick access to Melbourne city.

Mr McCarthy said he was not aware of any timetable for the sale of the properties, but it would probably happen next year.

Deliberately or not, Mercedes-Benz appears to have picked a perfect time to sell the dealerships, with sales running at record levels, up 14.9 per cent on last year and on target to pass 30,000 this year for the first time.

With an acclaimed new C-Class fresh in the market and running off showroom floors and with exotic models such as the Mercedes-AMG GT in the wings, a Mercedes dealership appears to be a gold mine.