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Mercedes to Double Downtown Outlets as Urban Areas Grow

Mercedes-Benz plans to double its downtown sales outlets worldwide by 2020 to serve the boom in city living with retailing that offers more technological wizardry and tasty treats than car models in showrooms.

The world’s third-biggest maker of luxury cars opened its first Mercedes Me store today in Hamburg, a new format that features billiard-table-sized touch screens for configuring vehicles. The carmaker, targeting drivers who haven’t yet bought the brand’s cars, plans to increase the number of city-center retail sites from the current 20, Ola Kaellenius, head of sales, told reporters at the Hamburg shop’s inauguration.

The Mercedes Me outlet offers a bistro area, with just a single car in the showroom rather than a range of models. The automaker, which also offers wholly online car purchases, is following larger competitors Bayerische Motoren Werke AG and Audi AG in developing a retail format that targets younger, media-oriented buyers in urban areas.

“We want to have a casual atmosphere at the Mercedes Me store to enable an experience of the brand,” Kaellenius said. “It’s not the traditional hard sell as at a dealer.”

The carmaker, owned by Stuttgart, Germany-based Daimler AG (DAI), has yet to decide which of the existing urban-center outlets will be converted to Mercedes Me shops, spokeswoman Ulrike Bless said. Cities where Mercedes has conventional showrooms downtown include Berlin, Munich, Milan, Tokyo and Beijing.

Giant Screens

Audi, the most profitable brand at Volkswagen AG (VOW), said in mid-2012 that it plans a 20-site network worldwide of Audi City stores equipped with giant LED wall screens for customers to design their cars. BMW’s I sub-brand of electric and hybrid autos has a website enabling direct online purchases.

The Mercedes Me Internet sales site, begun in draft form in March, will be fully operational in 15 European Union countries in September, Bless said. Every customer will have an ID similar to the Apple Inc.’s iTunes music store in an effort to sell them more side products such as insurance and financing, Kaellenius said.

Daimler is planning to dispose of 36 Mercedes dealer outlets in Germany that employ 1,500 people, labor representatives said last month. Kaellenius said the reorganization is following shifts in customer habits.

Revising Distribution

“We are refocusing our distribution network in Germany and looking at which sales outlets are strategically important, so we’ll undertake one or the other transactions together with our contract partners,” Kaellenius said. “This fits with our inner-city format focus, where new customers who don’t drive out to the industrial areas every day can get in touch with our brand.”

Mercedes’s global deliveries rose by a double-digit percentage in May, Kaellenius said, without specifying figures. The carmaker is scheduled to publish sales numbers tomorrow.

The Car2go car-sharing service, currently offered in 26 cities, is profitable in some locations, and the business is still in an investment phase, Kaellenius also said. Daimler said on May 30 that it’s pulling Car2go out of the U.K. because of a lack of demand, its first withdrawal from a country.

To contact the reporter on this story: Nicholas Brautlecht in Hamburg at nbrautlecht@bloomberg.net

To contact the editors responsible for this story: Angela Cullen at acullen8@bloomberg.net; Chad Thomas at cthomas16@bloomberg.net Tom Lavell, David Risser

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