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Mercedes admits past errors as new sales plan bears fruit

Date: 15 November 2013   |   Author: Guy Bird

Mercedes-Benz UK is poised to break through the 100,000 total sales mark by the end of 2013 for the first time in the company's history on the back of a better relationship with UK fleets.

But it wasn't always so, as UK chief executive Marcus Breitschwerdt candidly admitted to BusinessCar: "Britain is like the Premier League of the car business with retail and corporate. But we used to be awfully weak in the fleet business - we switched it 'on and off' as a kind of emergency."

Breitschwerdt says he quickly sought to change the way things were done after joining the UK operation in 2011.

"Now we have a consistent series of offers, which we make available in advance to all the major players and which they know they can rely on every four months," he continued.

The German manufacturer achieved total UK sales of 96,627 in 2012, of which 64% or 61,553 were business sales of one kind or another. Mercedes recorded 38,306 to what it terms 'fleet and business', with the other 23,247 including daily rental (just over 5000), demonstrators and internal fleets.

Breitschwerdt said daily rental would continue, but only when carefully managed.

"I want daily rental for marketing reasons," he said, "but nicely equipped cars. There is no merit in putting somebody in a poorly specified Mercedes E-class from Heathrow Airport."

Direct sales such as contract hire and leasing now represent 20% of Mercedes sales, where previously it was 5-6%, and Breitschwerdt points to a better understanding of the UK business market being key.

"The specification of our cars has changed," he says. "Previously, we had the wrong engines, for the E-class especially - they didn't fit into the UK's tax schemes. But now, from being far behind the BMW 5-series, we are the number one corporate car in this country." 

New, less expensive and more widely appealing products seem to be helping too.

Breitschwerdt said 70% of A-class sales are conquest customers (who are younger too, at an average age 43), while the sister CLA product is also going well with 2255 sold since going on sale in June.

"Since 2011 when I joined, we have created 40% growth very profitably, and the UK operation is now a kind of flagship within Mercedes' European market," Breitschwerdt concluded.