Direct-to-consumer vehicle sales models are ineffective because manufacturers take on significant operational risk without achieving additional returns, while dealerships have developed efficient ways to operate on thin margins (typically 2.5-3% nationally) and create value through specialized services and customer relationships.
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Why Mercedes Dealers Think Direct Sales Won’t WorkAdded:
direct sales. Do you worry about those?
>> I don't right now. Um I don't think it's a future um for any of the manufacturers. I think that the tests that they've done in other parts of the world have proven that it is not effective. Um they're they're taking on all that risk and realizing that there's no additional return for it. Right? So the dealers have found ways to be efficient in a very difficult structure.
Um and I think that the manufacturers are starting to realize that we should just they should just let us do our thing.
um because we can find those efficiencies, we can find opportunity to create that that little bit of margin um that we operate on, right? Average margin is maybe 3%, two and a half, 3% nationally, something like that from Mercedes, a little bit higher. But, you know, it's it I don't I don't understand why a manufacturer would want to take back all that risk for that little bit of
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