Mercedes-Benz

Date: Wednesday, February 7, 2007

You launched the latest version of Sprinter in 2006. How's it doing?

So far as our order bank is concerned we're ahead of our original target. That's despite the fact that the large van market has fallen by around three per cent. Actual Sprinter registrations have been a little bit behind the figure we forecast, simply because a lot of the vehicles on order are still in the pipeline. There have been some slight delays in the production of certain models and long lead times at bodybuilders.

How many Sprinters do you expect to sell this year?

Obviously a lot will depend on how the large van market performs but we'll be looking to increase our share by one per cent. In terms of numbers that probably equates to another 1,000 units.

That would take you from some 15,000 sales annually to around 16,000. That seems to be quite a modest ambition given the amount of money that Mercedes has invested in developing new Sprinter, plus the fact that you now offer a wider range than you did with the previous model. Why so cautious?

I should stress that the figures I've quoted are minimum figures and of course we don't really know what the market will do in 2007. What we do know is that Sprinter has enjoyed several years of record sales and so we're building on a position of strength.

    

Which Sprinter model is proving to be the most popular?

As usual it's the medium- and long-wheelbase 3.5-tonne 311CDI panel van and by a considerable margin.

What's been the reaction of existing and prospective customers to some of the new models you've added to the Sprinter line-up? I'm thinking, for example, of the 5.0-tonner and the 17.0m³ van with the Super High roof.

It's been positive. Generally they're pleased that we've added some extra strings to our bow and that we now have big-capacity vans available that allow us to compete a little bit better with the huge Iveco Daily.

Is that positive response being translated into sales?

Yes, although from where I'm sitting it's difficult to know how many of them are substitutional. What I mean by that is that a customer who has just bought an extra-long, extra-high van might have bought a long, high van in the past, so that doesn't translate into extra business. That said, I'm sure we'll inevitably achieve some incremental volume. One of the key things for us is to improve our performance in sectors where traditionally we've not been very strong.

Who is buying the mighty 184 bhp 3.0-litre V6 diesel Sprinter?

Obviously the emergency services first and foremost — the bigger the engine the better so far as they're concerned — plus owner-drivers who perhaps work as international couriers and want something that's quick and smooth. The order intake is exceptionally high.

Sprinter is now being marketed with an optional conventional automatic gearbox as opposed to the now-deleted Sprintshift automated manual 'box offered in its predecessor. How well has it been received?

Some Sprinters equipped with it are now in operation and it's proving to be a far better option than Sprintshift. In my view it represents the next step forward. It offers a seamless gearchange and is proving more acceptable to customers than Sprintshift was.

So do you anticipate that automatic Sprinters will account for a higher percentage of total Sprinter volume than those fitted with Sprintshift did?

Yes, but I don't know what that percentage will be off the top of my head. It's not something we've studied in any great detail so I can't really give you a figure. What I can say, though, is that it's easier to market. People relate more easily to the straightforward Park-Reverse-Neutral-Drive concept than they did to Sprintshift. So as dealers start to come to terms with it and promote it we will naturally see a sales increase.

Do you think that the automatic 'box will offer better or worse fuel economy than Sprintshift did?

It shouldn't be worse and it might well be better because the vehicle will be working more in the optimum range.

What sort of operator is opting for the auto 'box?

We're targeting it at the emergency services — it's rare for front-line ambulance fleets to take manual 'boxes — and firms on city centre stop-start delivery work. If they're running vehicles that have to handle from 60 to 90 drops a day then they will benefit.

In that situation, among the big benefits are extended clutch life and reduced driver fatigue. Ensuring drivers don't feel so tired — and thus more prone to making mistakes and having accidents — at the end of their shift should result in improved road safety, but new Sprinter is helping to reduce accident rates in other ways. As well as being fitted with ABS as standard it's equipped with a standard adaptive Electronic Stability Programme. Taking into account the height and position of the load it makes it less likely that the vehicle will roll over if the driver has to swerve suddenly on a wet or icy surface. But do customers appreciate the value of these safety features?

Some do, some don't, and under those circumstances we have an obligation to get the message across that safety is something that's intrinsic to Mercedes products. Not only are there a number of active and passive safety features that are fitted as standard, there are lots of other things that can be specified as extra cost options. I'm thinking here of items such as rear parking sensors, rear view cameras and passenger airbags.

What's the split between Sprinter van and chassis cab sales?

So far as the overall market Sprinter competes in is concerned the percentage split is 70/30 in van's favour. With Sprinter the respective split is roughly 81/19, although when it comes to 4.6- and 5.0-tonners the chassis element is quite strong. People see us as being very successful in the parcel and courier market which is of course dominated by long-wheelbase high-roof vans but what we also need to do is target builders and indeed chassis cab users of all descriptions. We have to explore these markets and understand what the barriers to doing business are. We've revisited our dealer sales training programme so far as chassis cabs are concerned and produced new literature and brochures. We offer a Sprinter chassis cab with a dropside body and we offer a tipper too, both factory-built. At times I think they're our best-kept secrets. We're now entering into an arrangement with a UK bodybuilder to provide a chassis cab-based Luton. In conjunction with Kerstner we also offer a factory-built fridge van. A lot of the 311CDI vans we sell are of course converted to refrigerated specifications by third parties and quite a few of the chassis cabs we supply are used as platforms for fridge box bodies.

What's the situation with Sprinter minibus?

We're about to launch factory-sourced 13-, 15 and 17-seaters and we're considering introducing a factory-sourced welfare minibus.

When do we see the 4x4 Sprinter?

During the first half of 2007. However, we've no immediate plans to market the 4x4 Vito in the UK.

    

What's happening with Vito?

It does really well in the retail market; ie so far as sales to owner-drivers and small businesses are concerned. In fact we get about 27 per cent of the available retail medium van business, which makes us retail market leader. Vito, however, faces stiff competition in the fleet market. Unfortunately it's somewhat distorted by the aggressive approach to pricing taken by some of our competitors in order to win certain deals and we wouldn't want to discount to the extent that they do.

Do you think Vito fleet sales suffer because it's got a foot-operated parking brake?

It was a worry when we initially launched the vehicle, but as things have turned out it isn't an issue at all.

How many Vitos do you expect to sell in 2007?

We're anticipating a slight downturn in the sector Vito competes in but we would look to maintain sales at around 8,000 units.

Which models are the most popular?

The 109CDI Compact and Long. As with Sprinter, though, we're concentrating on improving our performance in areas of the medium van business where we are weak.

What are you up to with alternative fuels? Are you doing anything with hybrids for instance?

We're planning to re-market the Motor Stop Start system we offer on Sprinter as a micro-hybrid. When the vehicle is idling the engine automatically cuts out after a few seconds. The fact that the engine isn't running for a lot of the time leads to reduced exhaust emissions and improved fuel economy, and that benefits the environment.

What's happening with Vario, Sprinter's bigger brother?

We've now got a version that meets the latest Euro 4 exhaust emission regulations and we've been absolutely bowled over by the number of orders we've got for it. We should sell roughly 500 in 2007.

To comply with Euro 4 anybody who buys the latest Vario will have to pour in a fluid known as AdBlue. Is that likely to be an issue?

We've not receiving a backlash of any kind at all.

---