Destination gives glimpse of dealership future

A nine-level complex with a price tag in the region of $100m is delivering a glimpse into the future of prestige automotive retailing. Mercedes-Benz Brisbane, a new flagship dealership for the giant LSH Auto group, is now open for business in the Queensland capital.

And although the development is still under construction, it’s shaping up more ‘glamour-brand’ five-star hotel than ‘grease under the fingernails’ automotive.

Described as a “luxury lifestyle precinct”, the bespoke development is at the Breakfast Creek Wharf entry to the Brisbane CBD.

With a total area of over 32,000 square metres, it’s claimed to be the home of the largest Mercedes-Benz retail operation in the Southern Hemisphere. Features of the mega-dealership include standalone AMG and S-Class showrooms, a two-level service reception and workshop (with 45 service bays), historic vehicle displays and a main sales floor on the top level of the seven-storey complex.

Real time vehicle configurators and the execution of the sales floor are in line with Mercedes-Benz' latest global standards – one of the first dealerships to open with the new look and systems.

LSH Auto is the world’s largest Mercedes-Benz passenger car retailer. Hong Kong based, the company also owns 11 Mercedes dealerships across Australia, including Mercedes-Benz Melbourne and Mercedes-Benz Sydney. Last year the group’s 270 outlets across seven markets sold more than 250,000 new Mercedes-Benz globally. It’s no stranger to the brand...

In the face of rumours Mercedes-Benz Australia is considering a move away from the conventional importer-dealership relationship, the huge development is a vote of confidence in the brand and the automotive sector Down Under.

According to LSH Auto Australia boss, John Good, Australia is a focus of the group.

“It’s [Mercedes-Benz Brisbane] actually one of the key developments of the group,” Good confirmed.

“We have a lot of confidence in the market here in Australia and obviously that confidence extends into the market here in Brisbane. The concept of the operation here is to really develop, not only a premium automotive dealership, but very much a lifestyle and very much a destination precinct.”

Upon completion, the Mercedes-Benz Brisbane development will include a number of food and beverage tenants, a cooking school affiliated with appliance brand Miele, a quay-side bar and other “health and wellbeing” businesses and practitioners.

Good admits the payback period for the development is beyond the scope of many investors, but says that LSH is in for the long haul.

“It's obviously a very large investment for the group here in Australia. But most importantly, LSH is a long term investor – so we're looking strategically for a very long-term investment in whatever we are doing.

“[It’s] Certainly about more than selling cars – creating a destination, creating a lifestyle precinct. Our overall investment and our overall strategy is to really create a unique destination, here in Brisbane. So very much a customer can come in, have their car serviced, but also at the same time they are able to enjoy a five-star premium dining experience; a health and lifestyle experience; to be able to really enjoy the whole ambiance of the centre up here,” Good told carsales.

Mercedes-Benz Australia dipped its toe into the brand experience pond with the establishment of a MercedesMe store in Melbourne’s CBD in 2017. At this stage, it’s the only non-dealership presence the brand has rolled out Down Under.

Is Mercedes-Benz Brisbane (MBB) in effect, at least in part, a super-sized Mercedes Me, carsales asked Good.

“It’s more LSH Me,” he quipped.

“It really gives the consumer the opportunity to really experience the holistic approach, not only to the Mercedes Benz brand, but also to LSH as well”.

The local LSH boss joins many in believing that brand experience will become even more of a decision factor for buyers as automotive technologies and executions struggle for differentiation in the approaching age of EVs and autonomous cars.

“Australians certainly have a love affair with cars. What is very important is to be able to create, the experience along with that love affair, and then offer the consumers [a unique experience]... So that's something that we can do, not only as a destination brand with Mercedes Benz, but also very much by creating a unique experience via such wonderful facilities we have here at MBB,” Good explained.

Last year LSH dealerships sold more than 5600 new Mercedes-Benz cars Down Under, in addition to more than 6300 pre-owned vehicles. It currently employs more than 560 across Australia.

Good is one industry stalwart who believes the dealership model in which LSH is so heavily invested has a place – even with the growth of online purchasing. But it’s direct customer contact that is the key, he contends.

“There will be a place for the traditional dealer network, but most importantly it’s more [about a focus on] the consumer experience. The contact with customer, which is so important, to create this unique contact, this unique experience and to be able to build upon that,” he explains.

“Experience is very important and that will certainly create separation between the brands and obviously will create separation between also the retailers in the market as well,” Good stated.

Good believes the “five-star hotel” approach to service LSH Auto is intending to create at MBB will reshape consumer expectations.

Service reception at the new facility is akin to a large, five-lane porte de chere where vehicles are checked in and immediately analysed using MAHA rolling-road safety dynos. The computer-controlled system checks suspension operation, brakes and tyres.

“In terms of operating like a five-star hotel; [this] is also very key to the experience of someone coming into the facility... Being met at the front by a concierge, the customer driving into the after-sales area, having the opportunity to go into world's first MAHA test lane system. It takes out any ambiguity from that as well, but puts a very unique experience to the customer,” Good explained.

Good says LSH Auto will “look at concepts” to develop its Melbourne and Sydney dealerships to create similar “destinations” to MBB but says the current set-ups are “certainly adequate” for what the group wants to achieve out of those respective markets.

So what does success look like for LSH’s bold Brisbane venture?

Good says it’s about delivering on Mercedes-Benz and LSH’s own values.

“Success is obviously very much living to our brand promise, that you as a customer come first. So everything that we are doing and revolving around that brand promise, if we're successful, that will come to life.”