Large Vans Shifting to Euro-Style Design with Better Fuel Economy

May 24, 2017 by Ryan ZumMallen, @Zoomy575M

Twenty years after its global debut, the Mercedes-Benz Sprinter is experiencing its most success ever.

Mercedes-Benz Vans sold 45,000 Sprinters globally in the first quarter of 2017, a sales record for the large cargo van. Mercedes credits the surge to popularity in Germany and the United Kingdom, as well as Russia and Latin America.

But the Sprinter is only part of a growing trend that has taken the world by storm. Annual sales of large vans across the board were up 7.4 percent globally in 2016 compared with 2015, according to LMC Automotive. Total sales of nearly 1.8 million vans represented a 22.4 percent increase since 2012.

The segment is picking up pace in the U.S. too. Following the Great Recession, commercial businesses sought vehicles with more capacity for carting goods as the economy recovered, which jump-started sales of large vans, said Alex Hare, a vice president for Strategic Vision, an automotive market research firm.

“The strength of the commercial van market is directly related to the strength of the broader economy,” Hare said.

Sales in the large van segment in the U.S. rose to more than 372,000 units in 2016, an increase of 13.2 percent over 2015 figures, according to industry research firm Autodata Corp. That outpaced light-truck sales across the industry, which rose at a rate of 7.2 percent in 2016.

And since 2012, large van sales jumped 44 percent, even as the average transaction price in the segment rose by 18.3 percent to more than $33,000 in 2016, according to market research firm J.D. Power.

For Mercedes, the United States has become the second-largest Sprinter market in the world, said Mathias Geisen, a general manager at Mercedes-Benz Vans.

“We’re convinced this is exactly the right product for this market,” Geisen said.

Last year Sprinter sales rose to 26,357 units, an increase of 2 percent and a best-ever sales record since Mercedes-Benz introduced the van in the U.S. as the Freightliner Sprinter in 2001.

“We see huge growth potential still,” he said.

Still, the Sprinter is far from the volume seller in its class. The Ford Transit – which is the segment leader – sold over 143,000 vehicles in 2016, followed by the Ford Econoline with 54,000 and the Chevrolet Express at 53,000. The Ram ProMaster sold more than 40,000, an increase of 45 percent.

Ford Transit Connect Van

Ford Transit (Photo: Ford)

At first glance, the Sprinter and its competitors seem primed for a bright future. However, the entire automotive industry may have reached a plateau, and large vans could experience a leveling off as well, said Dave Sargent, vice president of Global Automotive for J.D. Power.

“We don’t have the segment growing over the next few years,” Sargent said. “It’s a very specific type of owner. The needs that it supports are kind of specific, so it’s hard to see it taking a lot of sales away from other segments.”

Sargent and Geisen agree that large-van buyers are trending toward tall, Euro-style designs with better fuel economy.

“The whole marketplace is changing over to what we launched in 2001,” Geisen said.

While more traditional large vans like the Econoline and Express each topped 50,000 sales in 2016, both lost footing in the marketplace. And since 2012, sales of the Express have fallen by 11.5 percent while the Econoline dropped by 55.7 percent.

The GMC Savana also lost share in 2016, and sales of the Ram Cargo Van – a rebadged Dodge Grand Caravan – all but ceased, falling to just 21 vehicles.

The introduction of the Ford Transit in 2014 has played an important role, Sargent said.

Sales topped 143,000 in 2016, an increase of 21.8 percent over 2015. Ford discontinued sales of the Econoline passenger and cargo vans last year after more than 50 years of production. It still manufactures an E-Series chassis that is used for some types of work vans and recreational vehicles.

Transit is “just a more modern vehicle, and doesn’t have the compromises that you do with the old Econoline,” Sargent said.

Fuel economy is one of the main differences between the Transit and the Econoline. Commercial buyers take total cost of ownership into account with large van purchases, and strong fuel economy is likely moving them toward newer Euro-style vehicles, Sargent said.

And Ford is looking to boost Transit sales by growing its position in the domestic RV industry. Ford recently partnered with Winnebago to enter the Class B motorhome segment with the Fuse and the Paseo, which are both based on Transit van platforms.

It’s a page right out of Mercedes-Benz’s book. In 2004, the company collaborated with Airstream – a pillar among enthusiasts in the travel trailer community – to launch the Interstate, a touring coach for travelers seeking a high-end RV camping experience. In 2014, the brands partnered to create the Airstream Autobahn, which is a luxury passenger van for companies that cater to affluent travelers.

Regardless, Mercedes is preparing to fight the good fight. In anticipation of heated competition in the segment, Mercedes invested $500 million in a production plant in North Charleston, S.C., that will build the next-generation Sprinter by 2020. Local production of the large van, which is classified as a light truck along with pickups and SUVs, will also help the company avoid the costly chicken tax as well as reduce delivery times.

The company sees growing potential to appeal to commercial buyers as they grow more accustomed to vans in the Sprinter mold, Geisen said.

Roughly 40 percent of sales in the segment are still captured by traditional vans, but Mercedes sees the non-Euro style continuing to fade, he said.

“We’ve set up everything in a way that there are no limits for additional [Sprinter] growth for the next few years,” Geisen said.

Related: Mercedes-Benz to Electrify 1,500 Sprinter Vans for Hermes Delivery Fleet

2 Responses

  1. Dave Sullivan

    Why is Transit such a big success? Choice of powertrains. Sprinter doesn’t offer a gas engine and that really eats into their sales. The majority of Transits are gas powered. The Promaster is an oddball in the segment with front-wheel drive, awkward front seating and a terrible diesel option. The Promaster also doesn’t compete at all of the same body styles as the Transit and Sprinter…not as many roof options and no passenger van. Transit has been a success because it really doesn’t have any competition that can compete with the breadth of the lineup.

    Reply
  2. Margot McLoud

    Hi, do transit is 4wd and have nice cabin like a car not like a truck. How much gas takes?DO transits are 170WB? I am looking for van more like worker in Sprinter or just cargo van. I will transform the van for an RV. What about transit price. I am looking for 2015 or 2014.
    Sincerely
    Margot

    Reply

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