Sprinter Van Sales Rebounding in North America, Daimler Says

This story appears in the Aug. 20 print edition of Transport Topics.

DUSSELDORF, Germany — Officials of Daimler Trucks AG said their line of Sprinter vans is back on the path to success in North America.

Sales in the United States and Canada reached 20,803 last year, according to Volker Mornhinweg, who heads the van division of the world’s largest commercial vehicles manufacturer, up from about 10,000 during 2010. Sales in the United States were 16,577.

The company needed to regroup when the split from Chrysler led to the end of its primary sales channel — some 350 Dodge dealers.

The Dodge dealers — who had sold 16,500 Sprinters in 2007 and about 7,000 in 2009, as they were clearing their inventory — were preparing to switch to a van built by the company’s new owner, Fiat SpA of Italy.

To make up for the lost dealers, Daimler had a number of its Mercedes-Benz automobile dealers start selling the commercial vans.

“It’s been a great success story for us,” Mornhinweg said, during a recent interview near Daimler headquarters in Stuttgart.

There had been more than a little skepticism expressed by critics when the plan was first announced, since Mercedes dealers specialize in selling cars in the higher price ranges, while the typical Sprinter customer is seen to be a tradesman more accustomed to visiting Ford or Dodge dealerships.

Mornhinweg said there are about 130 Mercedes-Benz dealers selling Sprinters in the United States, in addition to about 60 dealers that sell the Freightliner brand. He said the company was intending to add 35 to 40 more Mercedes dealers to its network during 2012.

Company officials said Sprinter sales in North America over the first six months of 2012 were 30.7% higher than the year before, including a best-ever monthly total of 2,140 vehicles in June.

About 85% of Sprinter sales in North America are coming from the Mercedes-Benz dealers, and the balance from Freightliner dealers.

The current Sprinter line — most of which is produced in a bustling, crowded plant sandwiched in between a residential neighborhood and the industrial heart of this city — has been a notable success for Daimler in Europe since it was introduced in 2006. The first Sprinter line was produced in 1995 and was introduced into the United States in 2001.

In addition to its Daimler-badged vans, the company also produces a line for Volkswagen at this plant, known as the Crafter. The bodies are identical to the Sprinter, but the MB factory installs engines and transmissions that are supplied by VW.

The company is currently producing about 725 vehicles a day, or 160,000 a year, in this plant, which utilizes a number of vertical movements during the production process, owing to the lack of space and the resultant inability to expand the plant to allow the horizontal flow that typifies modern manufacturing.

The plant produces 240 varying combinations of body styles, engines, payloads and wheelbases on a single line.In Europe, the Sprinter vans had a 15.5% market share in its category over the first five months of 2012, down from 16.2% in the same period of 2011. In the United States, the company said it had a 7% market share in June, up from 6.3% in June 2011.

This factory also produces all Sprinter cargo vans that end up being sold in North America with the Freightliner and Mercedes-Benz badges. These vehicles are completely constructed here and then broken down and placed into boxes that are shipped by ocean to Charleston, S.C., where Freightliner operates a reassembly plant.

Daimler goes through this complicated reassembly process, Mornhinweg explained, because the United States imposes a 25% duty on most fully assembled Sprinters that are brought in.

The customs rules actually require that various parts of the disassembled vans must come to the United States in different ships, in order to be considered parts and not a completed vehicle.

Those high U.S. duties are not imposed on Sprinter passenger models, so Daimler ships those vehicles fully assembled to North America.

When the Sprinter was first introduced in the United States, Daimler officials had talked about eventually opening a full manufacturing plant there. But Mornhinweg said the cost of opening a new plant was high, “especially the facilities for painting” the vans, due to strict U.S. emissions regulations.

He said North American sales would probably have to reach about 50,000 vehicles a year to make it economical for Daimler to begin producing the vans domestically.

While Daimler was the first to bring the distinctive tall van style to North America, new competitors have arrived. Nissan has begun selling its NV200 model, and Ford will soon start selling its larger Transit line, in addition to its small van, the Transit Connect.

Daimler’s agreement with Volks-wagen to produce the Crafter began in 2006 and will expire in 2016, and it is unclear what the partners will do when it does. Volkswagen has been increasing its presence in the commercial vehicles market by taking controlling interest in truck maker Scania AB and MAN SE, direct Daimler competitors.

Daimler Trucks’ chief spokes-man, Heinz Gottwick, told Bloomberg News the company intended to “come to a conclusion this year” over its plans to produce the Crafter.