Mercedes Joins Growing Compact Commercial Van Segment

TELLURIDE, CO – As ’16 Mercedes-Benz Metris vans enter the U.S. part by disassembled part, Bernhard Glaser wants to clarify just what the vehicle is and who the intended customers are.

No, the Metris is not a minivan, even though it may look like one, says the vice president of Mercedes-Benz USA’s recently created van division.

So, no, the midsize commercial van Mercedes will introduce to the U.S. market in October is not aimed at the minivan crowd. Its targeted buyers are businesses needing vans to move cargo and groups of people around.

“If I get some minivan people buying this, great,” Glaser says while riding in a Metris near this Wild West town (Butch Cassidy robbed his first bank here) turned toney ski resort.

“But we are not targeting minivan moms and not forecasting sales based on that customer buying it,” he says.

Even with that consumer group out of the picture, Mercedes has high hopes in America for the Metris as well as the company’s amped-up commercial van business in general.

The German automaker introduced the fullsize Mercedes Sprinter van to the U.S. in 2010. Before that, it was badged as a Dodge (during the DaimlerChrysler era) and a Freightliner, a truck maker owned by parent company Daimler, the world’s largest producer of commercial vans.

The diesel-powered Sprinter is tall and curvy here and there, somewhat of a departure from the bland-box commercial van look. “People said, ‘What is that?’ Glaser says of the first U.S. reaction to the Sprinter. “Now, other auto companies have the (van) euro look.”

Mercedes sold 25,745 Sprinters in the U.S. last year, an 18% increase from 2013. About 70% are outfitted for use in deliveries, multi-passenger transport and construction trade. A big fleet customer is FedEx.

Bringing in the smaller Metris and creating a separate van division at Mercedes-Benz USA are moves intended at getting in on more of the action in the commercial-vehicle segment.

“If you want to grow in the U.S., you need to expand product, so we’re excited about bringing the Metris here,” Glaser says.

Mercedes established the separate van unit last year to better align with commercial customers. “They are totally different than car buyers,” Glaser says. “We didn’t have the (formal) organizational structure for van sales.”

Of the 360 Mercedes dealers in the U.S., 222 are Sprinter (and soon to be Metris) dealers with dedicated sales people and service facilities.

“You have to set up so you can do service work on vans fast, and offer weekend and evening hours,” Glaser says. “A commercial customer is losing money if a repair takes three days.”

The van division’s revenue last year hit almost $1 billion, much of that in parts and service sales. “Servicing vehicles is where the money is,” Glaser says. “You might not make the most at the front end, but the backend is lucrative.”

With deliveries of about 400,000 vehicles last year, Mercedes-Benz USA’s passenger-vehicle sales dwarf van sales. “We’re the little sister,” Glaser says.

Next year, Mercedes begins construction of a $500 million Sprinter assembly plant in Charleston, SC. An existing facility there serves as a reassembly factory. That’s because of an unusual manufacturing process. Sprinters are assembled in Germany, disassembled, shipped to the U.S. and then put back together again.

That cumbersome process is done to avoid a stiff 25% tariff on truck imports. The levy dates to the Lyndon Johnson Admin. It is called “the chicken tax.” Here’s why: Europe had imposed a duty on frozen chickens imported from the U.S. In retaliation, the U.S. slapped the 25% tariff on truck imports.

Assembling, disassembling and reassembling Sprinters is an oddity in today’s world of efficient manufacturing engineering that seeks to streamline all facets of vehicle building, from how far a line worker reaches for a part to how long it takes to put it on. 

“What we have to do logistically is a nightmare,” Glaser says. The new assembly plant in South Carolina will end that laborious process for the Sprinter. But the Metris, imported from Spain, will undergo it unless or until Mercedes begins to make the smaller van in the U.S. No word yet on the possibility of that.

Sales Process Different for Commercial-Van Customers

The Metris is the latest entrant in a growing compact commercial-van segment. The Ford Transit Connect was introduced to the U.S. in 2009. For a while, it had the small-commercial-van sector to itself. It remains the segment leader, but it’s been joined by the Chevrolet Express, Nissan NV200 and the Ram ProMaster City. And the Metris waits in the wings.

“Ford has 3,000 dealers and I have about 300, so I can’t compete on size, but I can compete on quality,” Glaser says, referring to Mercedes’ reputation for durability and reliability. “I may not have 3,000 dealers, but I have to have the 300 best dealers.”

Commercial-van sales run about 300,000 units a year in the U.S. Ford leads the pack with the fullsize Transit that progressively replaces the old Econoline that had a great run. Big vans make up 80% of the segment, but the smaller-van sector “is increasing tremendously,” says Mathias Geisen, general manager of the Mercedes van unit.  

Mercedes says that when it joins the downsized segment, it will stand out because the midsize Metris is bigger than the others yet still small enough to put in a garage. Like in “The Three Bears,” Mercedes considers the Metris not too big, not too small, but just right.

“The Metris can steal from the small vans because it offers more room and steal from the big vans if a customer doesn’t need all that much room,” Glaser says.

Adds Geisen: “The Metris definitely is the right size van for the U.S. market. It makes sense. We have a smaller van available (in Europe), but we thought this is the one to bring here.”

The Metris has sprinted around Europe for a while under the name Vito. Geisen says the moniker Metris works better in the U.S., suggesting urban use.   

Mercedes will pitch cargo and passenger versions of the ’16 Metris, which is on a new platform. Chassis engineers tuned the cargo version to carry heavier loads. Potential customers range from plumbers to flower-delivery people.

The 8-seat passenger model is intended for use as taxis, shuttle vans and such.

Then again, there might be the occasional customers who think the Metris serves their minivan needs. They are welcome to buy. “We will definitely not prevent anyone from buying it,” Geisen quips.

Minivan buyers might like the ride and handling of the Metris. The rear-wheel-drive vehicle is surprisingly nimble and responsive for a commercial van. Powering it is a 2.0L 4-cyl. turbocharged engine producing 208 hp. An Eco stop/start system is optional. The 7-speed automatic transmission comes with a 7G-tronic system allowing the driver to use paddles behind the steering wheel to shift gears. 

Mercedes opted to put a gasoline engine in the Metris, foreseeing owners doing a lot of city driving opposed to long-distance traveling for which a diesel engine is best suited.    

Glaser notes the absence of features that are near and dear to minivan buyers. “There is no panorama sunroof, no drop-down video screens and no fold-away seats. This was not built as a minivan.”             

Starting prices are $28,950 for the cargo van and $32,500 for the passenger version. The destination charge for both is $995. 

At the retail level, selling commercial vans is different than selling cars.

Car buyers usually enter a dealership individually and often drive out that day in  newly purchased vehicles.     

In contrast, commercial-vehicle buyers typically do fleet deals. Dealership van salespeople must do all sorts of follow up. They usually go to the prospective customer, rather than vice versa, Glaser notes.

Mercedes cars, from the entry-level CLA to the top-level S-Class, appeal to affluents who love luxury. But might Mercedes delux scare off budget-minded companies and fleet-procurement staffers who brand the brand too rich for their business blood?

“I get asked that a lot,” Glaser tells WardsAuto. “(Business) people say, ‘How can we buy a Mercedes?’ I use FedEx as an example. They use the Sprinter not only to deliver packages but to reflect the quality of their company.”

It’s the business version of you are what you drive.        

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