- Mercedes’ Retail of the Future (ROTF) programme goes on floor in India
- Mercedes will stop wholesale despatches, will sell directly to customers
- Mercedes-Benz has received 1,700+ units of customer booking through the ROTF in the beta phase
The German automaker has unveiled a new business model to boost car sales in India. As part of the new strategy, Mercedes-Benz India will now fully manage the inventory and pricing. Under ROTF, the brand will directly sell its cars to customers, while its dealerships will deliver the cars while also ensuring servicing and other deliverables.
With the ‘Retail of the Future (ROTF)’ plan, Merc is set to offer benefits of Rs 1-2 lakh on the selling price to its customers.
Remarkably, the strategy has already helped the company amass orders worth Rs $110 million or Rs 825 crore in less than a month in the world’s fifth-largest car market, receiving orders for more than 1,700 cars aided by the festive season.
The ROTF is a direct-to-customer sales model under which Mercedes-Benz India owns the entire centralised vehicle stock and will directly invoice a purchase to the buyer and will also handle processing and fulfilment.
Notably, India is the first CKD market and the only fourth for Mercedes-Benz globally after Sweden, South Africa, and Austria to adopt the ROTF model. CKD refers to import or export in parts and not as one assembled unit.
According to Mercedes-Benz India MD and CEO Martin Schwenk, the company will sell directly to customers under ROTF and all dealers will compete directly to provide “the best customer experience”.
“In June 2021, we announced a disruptive retail business model which is highly customer-centric and promised a seamless, Omnichannel and transparent experience to our customers. Today, we are proud to implement the ‘Retail of the Future’ in India after successfully establishing a robust digital backbone, which will support this significant transition in our retail business.
ROTF is a unique customer-centric business model, which caters to the evolving trends of our customers, while empowering our Franchise Partners by significantly reducing their financial and operational risks in the market,” said Martin Schwenk, Managing Director and CEO, Mercedes-Benz India.
ROTF’s direct-to-customer model ensures transparent pricing and best deals taking charge of all the inventory which reduces interest burden on dealers taking away incidental or handling charges from the system.
Also, the company said the new model helps it bring more flexibility in overall operations and benefits all stakeholders ensuring a better cost structure and charges the profitable business for dealers, transparent pricing for customers and a closer relationship between the company and end customer.
With the new format of retailing, Mercedes-Benz India said it will offer its customers national stock visibility transparently along with the production pipeline and there will not be any incidental charges for the customer. Also, VIN (vehicle identification number) will be confirmed during order booking, a feature being offered for the first time in India, the company claimed adding it will offer 14 days for order confirmation.
The ROTF Business model consists of two online and offline platforms, An offline Sales Transaction System and an online Digital Commerce Platform.
The Offline Sales Transaction System (STS)
STS will facilitate:
- Order Booking
- Order Finalization
- Handover: The franchise partner will deliver the car at the customer’s doorstep or delivery at the showroom
The Online Digital Commercial Platform (DCP)
It is an online store enabling the customer to book their choice of Mercedes Benz Car themselves.
Benefits of DCP:
- Search from the available stock, with product specifications and a detailed, transparent pricing
- Finance options presented upfront to customers
- Thorough booking process
“With ROTF, we have created a completely unified customer journey experience with many industry-first initiatives to its credit. For the first time in India, there are no incidental or extra charges for the customers. Customers now have direct access to Mercedes-Benz India’s national stock with a wide variety of inventory choices.
As the most trusted luxury brand in the country, we have set a new standard in customer centricity, a new benchmark in Franchise Partners’ profitability and introduced a new culture of competing only for the best customer experience,” Schwenk elaborated on the new sales plan launch.