German luxury carmaker Mercedes-Benz has started a new model of retail in India – what it calls ‘Retail of the Future (ROTF), under which it is now selling its cars directly to customers. Traditionally, a car-maker would sell cars to a dealer, and the dealer would then sell the car to the customer. Customers had the option of visiting different dealerships, comparing prices, and pitting one dealer against the dealer in a bid to get the best discount.
But now, in this new model, they would have to purchase the cars directly from Mercedes-Benz. What is the business logic behind this new model of retail? How does it change things for the customer? How does it change the business for dealers? And most critically, is this something that will remain restricted to the luxury segment or, are we likely to see even mass market car-makers make the shift to selling the cars directly to customers?
We explore all these questions in this episode.
Guest: Puneet Gupta, Director of Automotive Sales Forecasting at IHS Markit
Host: G. Sampath, Social Affairs Editor, The Hindu