Mercedes-Benz UK chief executive Gary Savage has said he finds the roll-out of the brand’s direct-to-consumer agency model car retail strategy “hugely exciting” – despite agents' two-tier car retail sector concerns.

Savage was quoted in a statement issued by the German premium carmaker after the first month of trading under the new model – to replace the franchised agreements previously held by its 138 franchised sites – brought a 20.9% decline in registrations to 5,030 units in January's growth market.

One AM100 car retail group director told AM the situation could have been worse if not for the OEMs’ registration of its own demonstrator fleet to replace those owned by retailers under the previous franchise agreement.

Despite Mercedes’ hopes of a move into luxury segments, the “concerned” retailer – now an agent under the terms of the Mercedes agreement – also called for the brand to implement a “pricing realignment” to avoid the creation of a two-tier sector where rival franchised brands maintain greater flexibility to entice customers with discounts and incentives.

Price 'isn't as compelling'