Mercedes-Benz is embroiled in a legal battle with 38 Australian dealerships, which claim they were misled about a potential profit hit.
Local Mercedes-Benz executives will face another grilling in court this week, after it emerged on Friday the German parent company was involved in the roll-out of the direct-to-consumer sales model and lawyers for Australian dealers question whether the local bosses deliberately misled franchisees regarding a potential profit hit.
into signing new agreements that stripped them of the valuable “goodwill” they had spent millions of dollars establishing over the years.Much of Mercedes-Benz’ defence lies in the assertion that Mercedes-Benz Australia alone was responsible for pushing for the dealership change, a claim it argues does not breach Australia’s franchise code and illustrates it was operating in good faith.
“We were pushing to be selected as one of the pilots, so it was not a push from Stuttgart; it was a push from me and my team to be included,” he said.Jason Nomikos, who took over as director of customer management, retail and network development and strategy at Mercedes-Benz Australia in June 2018, took the stand in Melbourne from Tuesday to Friday.
Despite several workshops, facilitated at times by Deloitte, Mr Nomikos said there was considerable pushback from dealers who argued the value of their dealerships and profitability would drop sharply through the change in model.Rather than buying stock and managing relationships with customers, the new model would effectively turn established dealerships into “showrooms” and Mercedes-Benz would manage the purchase of vehicles through a centralised purchasing portal.