Mercedes-Benz has revealed a plan to axe up to 20% of its German franchised dealerships and 10% of its global network by 2025 as part of its shift to a direct, agency model retail model.

Included in strategic announcements made in the German premium brand’s recent Capital Markets Day announcement was news that it aims to transact 80% of European car sales via an agency model and 25% online within three years.

In December Mercedes-Benz reached an agency model agreement with its European retailers which will lead to the new retail framework's introduction in the UK from 2023.

News of its accompanying network reduction plan comes alongside Mercedes’ assertion that it will refocus its model line-up in high-profit luxury segments, dropping cheaper models, suggesting an end to its more recent pursuit of market share alongside rival brands Audi and BMW.

Bettina Fetzer, Mercedes’ vice-president communications and marketing told the Markets Day event: “We need fewer large showrooms in mature markets.