End of the road for Mercedes taxis

November 14th, 2014

This article is more than 9 years old.

New rules remove incentive to use luxury cars

In some countries they’re the preserve of the rich and powerful, in Denmark you could be forgiven for thinking they are the preserve of taxi drivers. Almost one in four passenger cars sold by Mercedes in Denmark is to the taxi sector. But new rules for the sale of used taxis could put an end to this, Børsen reports.

Until now, taxi drivers have been able to resell their car without duty being imposed thanks to rules that exempt them from registration tax on vehicles. This has made it worthwhile for drivers to invest in expensive cars that hold their value despite a high mileage.

Now they will have to pay a duty of 180 percent of the vehicle's value when they sell – which is likely to cause drivers to buy cheaper cars and also to use the car longer before selling it.

Blow for Mercedes-Benz Danmark
This is expected to impact heavily on the sales of Mercedes, which has traditionally been the vehicle of choice in the Danish taxi sector.

“It’s obvious that when politicians change the conditions for a market so drastically with one blow, it will have consequences,” Rikke Hamilton, the head of sales at Mercedes-Benz Danmark, told Børsen.

“Even though we believe we have the best cars and offer the best service for the taxi sector, this proposal will have consequences for us.”

The old rules were introduced in the 1970s to improve the quality of Denmark’s taxi fleet. Mercedes has also made itself attractive to the industry by offering special service agreements, including a quicker delivery of spare parts and extended opening times at workshops.

But Lasse Mai, who owns a taxi firm that employs 40 drivers and uses a fleet of 13 Mercedes E Class cars, told Børsen he won’t continue to use the brand. “It’s out of the question that I’ll keep buying Mercedes cars here in Denmark,” he said.

“The loss on the car will be much too big when it needs to be sold on. That would be a sure path to bankruptcy.”


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