The court case between DaimlerChrysler UK and Mercedes-Benz dealers has been settled out of court.
The court case between DaimlerChrysler UK and Mercedes-Benz dealers is over. Autowired reported on Monday that the case, which has been closely followed by respective retailers and manufacturers around the world, was settled by an out-of-court agreement.
The agreement will give dealers an option to exit the franchise at one of four dates, while DaimlerChrysler will continue to restructure the network through the acquisition and appointment of new retail partners.
Dealers will now have the option to wash their hands of the franchise on January 2002 (which is the existing notice period), July 1 2002, January 1 2003 or July 1 2003.
Compensation will vary according to the date chosen and larger dealerships – which are retained – will be liable for some of the compensation to be paid to the culled dealerships.
Ideally, dealers would have liked to have been able to return to the status quo which existed prior to DaimlerChrysler’s move to terminate dealerships.
However, it now remains DaimlerChrysler UK’s decision as to what retail strategy it will adopt, providing changes are carried within the legal framework.
“We are pleased to have been able to come to an agreement with our dealers which heralds a new era in the motoring retail environment,” said Dermot Kelly, director of Mercedes-Benz passenger cars.
“During this period of negotiation we have continued to implement our plan through the acquisition and appointment of new retail partners.
“Preparations for the new format have therefore already begun and we are working to build the structure over the next 24-months with the first of the new dealerships opening in spring 2002.
Alan Pulham, franchised dealer director of the Retail Motor Industry Federation (RMI), described it as a “memorable and equitable agreement”.
He said that it came about as a result of the commitment of the Mercedes-Benz dealers to their Dealer Association. He added that the work the Association has done in partnership with DaimlerChrysler UK, will enable the whole dealer network to move forward in an equitable manner. “This should be an example to all the other dealer associations and manufacturers,” he said.
Dermot Kelly added: “We remain convinced that our plan will deliver the format that is right for our customers and dealers. It will improve customer service, improve the Mercedes-Benz retail experience and underpin the growth of our business in the UK.
“It is customers who will benefit most from the changes. In a fiercely competitive market DCUK cannot afford to ignore the consumer demand for a different and better retail experience.”