Mercedes-Benz parts at the ready

Mercedes-Benz Korea employees work at the parts distribution center in Anseong, Gyeonggi. The new center opened on July 10. Provided by the company

ANSEONG, Gyeonggi - At first sight, Mercedes-Benz Korea’s new parts distribution center (PDC) looks like a giant gray shipping container sitting on a green hill.

But inside, it’s neither dark nor dismal. Instead, skylights bring in sun rays from above and compared with other assembly plans, the warehouse looks more like a library. Mercedes-Benz Korea said that only 44 employees work at the new center, which spans the length of two football fields.

Although its outside appearance doesn’t match the luxury image of the German automaker, beneath the surface, the facility plays an important role in enhancing Mercedes-Benz’s reputation in Korea.

“They say people’s first car is sold by sales, but the second one is sold by after-sales,” Mercedes-Benz Korea Vice President Cho Kyu-sang, who heads company’s service and parts division, said yesterday. “If customers’ experience doesn’t match the value that they have paid, the second car never follows, so we wanted devote our best efforts to post-sales in Korea.”

In the past, Mercedes-Benz Korea was among other foreign automakers notorious for poor after-sales services. According to 2012 data from the Korea Consumer Agency (KCA), the company had 3,672 cars registered per service center, the worst among imported brands. Then, Mercedes-Benz customers had to wait a long time for their vehicles to be fixed.

But in recent years, the German brand has been trying to change that. While it has consistently added service centers, with 33 nationwide and five more to be finished by the end of the year, another improvement was building a larger PDC.

The PDC opened earlier this month after a year of construction at a cost of 52 billion won ($50 million). Located on a 17,800 square-meter (4.3-acre) plot of land, the facility is 2.5 times larger than the previous facility in Icheon, Gyeonggi, and stores 50 percent more auto parts.

The new center now holds about 31,000 parts, but still there’s extra room to store at least 28,000 more. The company has also acquired a 6,900-square-meter plot next to the PDC building for a possible extension.

The company said that establishing the center will help customers receive repairs quicker because the facility stores a wide variety of parts. Mercedes-Benz said that it even has parts for models manufactured in 1976.

“We have doubled our stock of parts that are in high demand so that customers don’t have to wait,” Cho said. “We will also start overnight delivery, so that even if customers check in their car at the service center in the late afternoon, the required parts will be there the next morning.”

From the center, parts are distributed to 59 shipping points nationwide. For the Seoul metropolitan area, shipments come in twice a day. The company handled about 600,000 orders last year, but this year, it expects a 15 percent increase.

Mercedes-Benz parts are currently distributed from its Global Logistics Center in Germany and some parts come from its regional center in Singapore. It takes six to eight days for parts to arrive in Korea via plane, while maritime shipping takes 70 days, according to the company.

But the company sees its large storage facility as a good opportunity to reduce parts cost in the long run.

In addition, the PDC also has a warranty inspection center to handle remanufactured parts, or “reman” parts. The company sends inoperative, failed or worn out parts called a “core,” which are disassembled in Germany and reborn as a component that’s as good as new. The remanufactured parts cost 26 percent less than a new genuine Mercedes-Benz parts as it saves on material costs.

“Reman parts are not recycled parts because they are rebuilt and tested under the same standard as new parts and are warranted,” said Cho. “It gives more choice to customers who are sensitive to price.”

BY joo kyung-don [kjoo@joongang.co.kr]