KUALA LUMPUR (July 14): Luxury carmaker Mercedes-Benz Malaysia Sdn Bhd (Mercedes-Benz Malaysia) has reached an agreement with its retail partners to introduce the agency model in Malaysia, one of which is Hap Seng Consolidated Bhd.

Under the agency model, sales contract with the customer will be with Mercedes-Benz Malaysia, and not the dealership. The dealership will only act as an agent and be paid a fee for its sales service.

Mercedes-Benz Malaysia said the transformation is part of efforts to meet changing customer needs in the digital era. The new agency model will offer its retail partners the opportunity to concentrate more on customers and their support, it added.

“As the first in the region to implement the agency model for the brand, we are confident that this transformative leap will further enhance our brand's presence and deliver an exceptional customer experience. Together, we look forward to an exciting journey in redefining automotive sales in a highly digital and technological era," said Mercedes-Benz Malaysia president and chief executive officer Sagree Sardien in a statement on Friday (July 14).

The new agency model is expected to be implemented in September this year.

In a separate bourse filing on Friday, Hap Seng said its subsidiary Hap Seng Star Sdn Bhd has signed agency and service dealer agreements with Mercedes-Benz Malaysia.

Under the agreements, which come into force on Sept 1, Hap Seng Star will be appointed as a non-exclusive agent to broker sales of Mercedes-Benz passenger vehicles and to support Mercedes-Benz Malaysia in the performance and fulfilment of Mercedes-Benz Malaysia’s direct sales to end-customers in Malaysia.

Hap Seng Star will also be appointed as a non-exclusive service dealer for the service of Mercedes-Benz passenger vehicles in Malaysia.

"In the meantime, Hap Seng Star will continue to represent Mercedes-Benz Malaysia for the Mercedes-Benz passenger vehicle sales in Malaysia based on the present dealership model," said Hap Seng.

Apart from Hap Seng, Cycle & Carriage Bintang Bhd also currently retail and provide after-sale services for Mercedes-Benz vehicles in the country.

Meanwhile, Mercedes-Benz Malaysia said its retail partners will maintain their pivotal role as experts and brand ambassadors, offering customers a luxurious experience at their retail network.

“They will play a crucial part in ensuring a seamless customer journey of omni-channel experience, from the initial research phase to the vehicle handover upon purchase."

At the same time, the new agency model will give customers even more freedom to choose from a national stock, regardless of location or channel.

"They can conveniently switch between and combine the different contact points, regardless of whether they want to exchange ideas with product experts in its authorised dealership, obtain information and/or conclude the purchase contract online," it said.

It was reported that the agency model has already been implemented in parts of Europe such as the UK and Germany and it is expected that by the end of 2023, more than half of new Mercedes-Benz models will be sold under the new agency model.

Hap Seng shares closed up three sen or 0.94% to close at RM3.21 on Friday, giving it a market capitalisation of RM7.99 billion. Its stock price has fallen by 49.8% year to date.