Mercedes-Benz van division

Date: Monday, November 22, 2010

Volker Mornhinweg, worldwide head of Mercedes-Benz’s van division, talks to Steve Banner about how the firm has steered itself through the recent downturn and what to expect in the near, and the more distant, future.

How hard was Mercedes-Benz hit by the downturn in light commercial registrations?

Last year presented us with a huge challenge, an extreme challenge. It was one of the first times ever that we’d been hit by such a deep dip in van sales. Demand fell by 40%, so our team had to work very hard to bring down our costs. That’s what you have to do if there’s a crisis and orders for your products just aren’t there. On the other hand we had to keep investing in research and development because we knew demand would come back. The only question was when. It was, in fact, a bit astonishing to us that we saw such a good recovery in Europe earlier this year, but it has put us back on track sooner than we expected, and that is great.

Will the recovery be sustainable in your opinion?

I think what we will see for the rest of this year and into 2011 in Europe will be a slow but steady increase in demand. It will be sustainable growth. In my view that’s better than a sudden rocketing upwards in business because you never know if that will end with a double-dip recession. I don’t think we’ll see a double-dip on this side of the Atlantic, but there’s a bit of a risk of it in the USA because unemployment is high and they still have problems in the housing market.

Amid all this you have been involved in a major renewal of your product range, including the launch of the new Sprinter. How well has the new model been received?

The reaction has been very positive. Buyers appreciate the whole package, and fortunately the Sprinter sector of
the market has been one that’s recovered particularly well. We’ve hit it at just the right time and we’re taking an 18.3% market share across Europe. Customers like the decision we made to go straight to the Euro5 exhaust emission standard on everything before we had to (that’s been especially well-received in the UK), they like the new four-cylinder diesel engine and the new transmission, and they like Sprinter’s fuel efficiency. Combining the engine with EcoStart [which shuts down the engine in stationary traffic, reducing fuel consumption by 7-10% as well as cutting CO2 emissions] is especially beneficial so far as fuel economy is concerned.

How popular an option is EcoStart  proving to be?

Around 10-15% of Sprinters are ordered with it and the percentage is increasing.

At present it’s offered solely in combination with a manual gearbox. How soon before it’s available with an automatic box?

That will take a while because we’re having to develop a completely new gearbox system to accommodate it. But we’re working on it.

The Sprinter is marketed with some beefy engines, in particular the 190hp V6 3.0-litre diesel. Is there a real need for all that power in a van?

Remember that the Sprinter goes up to 5.0 tonnes. The V6 is well-suited to that sort of weight because as well as being powerful it provides more than enough torque. It’s certainly not just there for marketing purposes – customers genuinely want it.

Moving back down the weight scale, you’ve recently unveiled the latest Vito. It’s early days, but what’s the response been?

So far the feedback has been positive both from the press and from our dealers. The feeling seems to be that we’ve spent our money to good effect, especially when it comes to improving fuel economy, and comfort and reducing noise, vibration and harshness. Now we’ll see what the customers think.

You’ve retained the foot-operated parking brake. Why?

It’s a Mercedes-Benz icon. It’s an approach that’s associated with us – my own car has one – so we’ve decided to stick with it. It works perfectly and it’s easy to use. Most importantly, we’ve had no negative feedback about it. If customers had said they didn’t like a foot-operated parking brake, then we’d have found another solution. But they didn’t, so we don’t think there’s any need to change it.

The Vario – the very big brother to the Vito and Sprinter – is now in its 15th year of production. What does the future hold for it?

I became head of the Mercedes-Benz vans division last April – before that I was managing director of Mercedes-AMG – and one of the first pieces of feedback I got was from the guys who produce the Vario.
They said we had to keep building it, a view I subsequently had confirmed by [express carrier and package delivery company] UPS, who told me that it was one of their most important vehicles. 

 

Why did UPS say that?

One reason why they like it is that its design makes it easy for the driver to get up from his seat and walk straight into the back of the vehicle to pick up a package ready for delivery. So I’ve promised that we’ll keep it in production. It is to get a new engine that will meet the forthcoming Euro6 exhaust emission regulations, a facelift, and is set to continue in build beyond 2013. We’re not considering making the Sprinter bigger instead.

 

Some of tool firm Snap-On Tools’ 400-plus franchisees are now taking delivery of the first of a new generation of mobile shops based on a facelifted  7.5-tonne Vario 816D (and also a 10.0- tonne Atego 1018 chassis) on lease deals arranged through Mercedes- Benz CharterWay. Which engine are you employing in the model?

The one that is used in the current Mitsubishi Fuso Canter [like Mercedes, Mitsubishi Fuso is part of Daimler], although we’ll have to make some modifications. We’re now starting to look at the details of how we will proceed.

 

Mercedes has invested a considerable amount of money in environmentally friendly power for LCVs. The fruits of this investment include the zero exhaust-emission battery-driven E-Cell version of the latest Vito. Which alternative fuel solution do you believe van operators will ultimately favour?

I wish I had a definitive, clear answer for you. What I can say is that we intend to continue investing heavily in optimising the efficiency of our diesel-powered vehicles so far as both the engines and the transmissions are concerned. That’s very important. At the same time we’re making a major leap forward in the electric market with the E-Cell. We plan to have about 2500 out there, and they will help us learn a lot more from customers about how battery-powered vans perform in normal working conditions. That will help us in our future plans.

 

In terms of green development, what else have you been up to?

We’ve developed gas-powered versions of the Sprinter and longer term we have plans to introduce a hybrid. I’m not talking about a mild hybrid – the degree to which we’re already reducing the fuel consumption of our standard diesels means that it’s probably not the future so far as we’re concerned – but the sort of hybrid that will allow you to use diesel power on inter-city runs but switch to electric in inner-urban areas. We have already created hybrid Sprinter prototypes.

 

Having marketed Sprinter in the USA under other brand names, you’ve now started selling it with a Mercedes badge on it. How’s it going?

We began doing this last January and so far it’s been very successful. We’ve signed up 133 dealers to date, we’re planning to recruit more and the USA has now become our fourth-best market. Turning to China, we started selling the Vito and its Viano passenger- carrying stablemate in May of this year, and it’s become our fifth-best market. So it looks as though we made the right decision in both cases.



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