Dealer group boosts new car profits after Mercedes UK agency shift

One of the biggest Mercedes dealers in the UK, Penske, has said profits on new car sales have increased after the German car maker rolled out the new ‘agency’ sales model at the start of the year.

“Overall, we’ve been quite satisfied with it at the moment,” CEO Roger Penske said on an earnings call to analysts on Wednesday.

Dealers across all brands have been fearful that a switch to the agency model – whereby the car maker takes control of sales and pays the dealer a delivery fee – will reduce their profits.

Penske, which owns the Sytner dealer group, said Mercedes pays it a 5% commission on each sale while leaving the dealer in control of F&I (finance and insurance) add-ons.

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