Mercedes U.S. Van Chief: New Sprinter Plant Fuels Market Expansion

September 13, 2018 by Jerry Hirsch, @Jerryhirsch

A giant order from Amazon will jump-start Mercedes-Benz’s production of its Sprinter vans at a new factory in North Charleston, S.C.

But the order for 20,000 package delivery vehicles over the next year is just one facet of the German automaker’s strategy to become a big player in the U.S. cargo van market.

Mercedes-Benz spent $500 million on the factory, which will build Sprinter vans for the U.S. and Canadian markets. caught up with Robert Veit, managing director for Mercedes-Benz Vans USA, at the plant opening this month and discussed the automaker’s plans. Here is an edited version of that conversation.

What does this new Sprinter factory do for Mercedes-Benz?

We’re celebrating the opening of this plant. Finally, we will have a Sprinter built in America. With this new plant we now have the chance to grow in all the segments – passenger transportation, parcel delivery services as well as chassis with cabs.

Which market has the most growth potential?

That is complicated. If you look just at registrations you see that the East and the West Coasts have the highest vehicle population. Those are the markets where we will mainly concentrate. The largest segment is parcel delivery services and the delivery of any goods. Approximately 50 percent of our sales currently go into this segment. About 20 percent of our sales go into a smaller segment – people transportation. Those are shuttle buses and mini buses. The remaining 30 percent is chassis with cabs. Those go to various upfitters. Our main segment there is recreational vehicles.

The vans are popular with consumers for conversion to surfmobiles, overlanding vehicles and other recreational uses. How big is that business? 

It is a small market. I personally love it. It’s great to see the creativity of people and what they are doing with the vans. Recently I was visiting a dealer in Utah and I was so surprised to see the variety of what was being done to the vans in his workshop. But it is still a small segment. readers say the four-wheel-drive Sprinter van is in short supply. When will you have more?

I would love to have more. We have customers waiting. We didn’t plan for such a high demand. For that reason, our current suppliers cannot produce all the components we need to meet that demand. But we are trying to ramp up. We know we need to increase supply the sooner the better, but I cannot give you an exact time. They will also be assembled in the U.S.

Mercedes-Benz officials say the new factory has lots of flexibility. What can it do?

The flexibility does not mean that you can produce an S-Class [sedan]. The flexibility meant that you can produce all six variants of the van rather simply – the 1500, the 2500, the 3500, the 4500, different wheelbases, different vehicle heights all on the same assembly line.

Could you make the smaller Mercedes-Benz Metris at the plant?

The Metris is currently imported as an SKD, [or kit product] and this will continue for the time being. It could be built here if the market demand grows. It is up to us in the sales organization to prove if we can ramp it up. But there are currently no plans to localize Metris production in North America.

(Mercedes-Benz imports Metris vans that are assembled in Europe, which are then disassembled before they’re shipped to the U.S. as vehicle kits. It then rebuilds the vans in the U.S., allowing the automaker to avoid a 25 percent tariff on imported commercial vehicles and trucks.)

Why did you add a gasoline version of the Sprinter van for the North American market?

We are offering both because that is what our customers asked for. The gasoline engine is not available in the heavy-duty versions. We have some clients who are only using gas in their fleets. There are some segments that we currently don’t sell to because they are requesting gas engine vans. One segment would be the rental vehicle market.  This is a segment that would be absolutely new and we could tackle it.

Read Next: First Drive — 2019 Mercedes Sprinter Van Is Agile and Versatile

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