News - Mercedes-Benz

Market insight: Benz to add spark to van sales

Van load: Mercedes-Benz is looking to its commercial arm to provide a sales booster shot (pictured: Vito).

The loss of a big van client has left Mercedes-Benz with a large load to carry

Mercedes-Benz logo2 Sep 2013

MERCEDES-Benz Australia has revealed it was once deep in talks with electric vehicle infrastructure provider Better Place about bringing battery-powered delivery vans to Australia.

However, the commercial vehicle arm of the luxury car-maker said further hopes of selling a range of battery-powered delivery vans had been shelved since the Israeli electric car recharging infrastructure company hit cashflow problems and wound back in Australia.

Speaking last week in response to questions on why the natural gas version of the Sprinter NGT (Natural Gas Technology) was struggling in Australia, Diane Tarr, the general manager of Mercedes-Benz Vans in Australia, said it was down to a lack of infrastructure.

“We were talking very closely with Better Place in terms of trying to work a really good partnership out, and we know what happened to Better Place,” she said.

“I think in the market in Australia, the natural gas and electric vehicles are still bubbling away but not getting too much traction at the moment.” In the meantime, Mercedes-Benz plans to expand its network of van dealers throughout Australia as the commercial arm of the luxury car-maker aims for a bigger slice of the trade market.

The move by the commercial van division is partly in response to the loss this year of a lucrative five-year Australia Post van supply and support contract to commercial van partner Renault.

The German car maker still has a contract to support Australia Post’s existing range of Sprinter vans it uses for mail runs, although the fleet will move to Renault-badged Trafic and Master vans.

However, Volkswagen’s Transporter van range is now in Mercedes-Benz’s sights as it attempts to chase down the biggest seller of premium-badged commercial load-luggers in Australia by expanding its van dealer network.

The Transporter is outselling Vito at the rate of almost three to one, the latest VFACTS sales data shows.

“For us the Vito sits in a very competitive market,” Ms Tarr said. “We have had our challenges this year, and we have had in our discussions, one of our discussions yesterday, how do we maintain our position and grow that position, particularly in a very competitive space as well.”

According to Ms Tarr, Mercedes-Benz will explore expanding its service network to passenger car showrooms and even truck service centres to help owners benefit from whole-of-life cost of ownership, not just the purchase price.

“In terms of the dealers, we certainly have a focus on them in our network whether it may sit with passenger car dealership or whether it sits with a commercial vehicle dealership we certainly dictate focus and dedication on that, so from that aspect I don't think there is a blurring of preference to cars in that sense as well.”

According to Klaus Maier, Mercedes-Benz’s global vice-president of sales and marketing for the car-maker’s commercial van division, global sales for the commercial arm were growing, and expected to grow in Australia.

“We have grown in the last six months overall, so we sold roughly 1 per cent more than 2012 and this was for us quite successful because you know some major European markets are still struggling.”

The company’s push into Australia will see a “double digit” increase in the number of commercial vehicle showrooms that will reflect the equivalent growth in the passenger car and truck divisions, Mr Maier said.

“We increase our network for vans dramatically in the next few years, and we are starting already now,” he said.

“This year we will open a few more dealers for vans. It's not always a van specialist – it can be, let's say also, a Fuso truck dealer who could have vans at the side, or a truck dealer.

“We will come up with a two-digit figure more service points in the next six months.

“So the exact figure I cannot give you now, because we are still in discussions with dealers, but it is more than 10 additional service points in the next six months.”“The whole network is being reviewed and making sure there is a greater maximisation of capitalising on the growth and making sure we have the right facilities, the right capabilities to be able to grow,” Ms Tarr said.

“We have not made a final decision on how we come up, but definitely we will make sure that in every area the van owners will have a better service than today,” Mr Maier said.

“In some areas where we have also truck dealers we will have as an option and also the opportunity to service the van ... because they are open anyway for the truck customers.”

Another option, according to Ms Tarr, was to offer more on-site servicing to fleet operators, a service that some commercial vehicle dealers within the Mercedes-Benz network already provided.

Mercedes-Benz says it will also look at what it can do to customise vehicles to suit the Australian market.

“We certainly have discussed and looked at certain measures going forward to be able to look to a variant adaption to look at a price point potentially, and then what we can do in terms of certain value-added options and talk around the total cost of ownership,” Ms Tarr said.

In the meantime, though, Mercedes-Benz’s traditional van markets continue to struggle as key van-buying markets in Europe struggle with economic recession.

Mr Maier said van supplies had been diverted to other markets, including North America and Australia, to make up for the loss of sales in Europe.

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