How Mercedes Vans transformed into an 'end-to-end solutions provider'
AUTOMOTIVE NEWS EUROPE MONTHLY MAGAZINE
Volker Mornhinweg stands next to a Mercedes Sprinter van.
Mercedes-Benz Vans enjoyed a record sales year in 2017 after its volume rose 12 percent to 401,000 units largely because of strong demand for the midsize Vito. The base of the Daimler division’s strength, however, comes from the large van segment, where the recently updated Sprinter accounts for every second vehicle it sells. Investments in the next-generation Sprinter hurt profitability last year but Mercedes Vans boss Volker Mornhinweg said the unit still achieved its strategic target of a 9 percent operating margin. He discussed the division’s outlook with Automotive News Europe Correspondent Christiaan Hetzner.
You just launched the new Sprinter large delivery van. What expectations do you have for the Sprinter?
We forecast a significant increase in volume for this year compared with last year. That being said, we do not provide future sales targets for the business or for individual models such as the Sprinter. We did, however, achieve a new record last year with more than 200,000 Sprinters sold, despite it being in the final year of its life cycle.
How has the LCV business changed?
In the past, we thought purely in terms of conventional vehicle attributes: length, width, height and payload. Today, it no longer suffices simply to offer a range of different vans for various requirements. The customer wants to optimize his entire value chain now. And we have to think of ourselves as an integrated solutions provider
What did you do?
About two years ago we began changing our approach from a straight-forward vehicle manufacturer to a provider of holistic end-to-end solutions tailored to the individual transport needs of our various customer groups. The new Sprinter is the first core product to reflect this.
What does this mean?
Take the example of a courier. How can we help a customer be more efficient starting from the moment they start loading packages up the ramp to the moment the driver returns after his route? Digitalization offers all sorts of possibilities to improve his profitability in the future.
How does that work?
Our Vision Van concept showcased a fully automated cargo area that can transmit information in real-time about the number of packages still in the hold. Transporting perishable goods such as groceries or sensitive pharmaceuticals can be better guaranteed by permanently measuring the temperature inside the vehicle. Another example comes from the connectivity solutions that the new Sprinter offers.
What other ideas do you have?
Together with the Swiss retailer Siroop, we piloted the use of drones in Zurich in 2017 to transport goods to our vans. We learned a lot from this collaborative approach. We are planning further tests in the coming months.
Daimler is working with Robert Bosch to develop autonomous vehicles. With people movers such as the V class, your division would seem ideally placed for new self-driving mobility services.
Last year we founded ViaVan – a joint venture with the U.S.-based startup Via – to bring on demand ride-sharing from the U.S. to Europe. Today, the service is live in Amsterdam and London. Berlin will follow soon. Several customers signal through a smartphone app where they need to go. The algorithm plots the most intelligent route and a shuttle picks them up and drops them off at virtual bus stops – all for a price that lies between public transport and a taxi. This is a solution that we are already offering today. Autonomous driving will open new business opportunities.
So, your parent develops the autonomous driving software, packs it into a Mercedes V class, Via then acts as a dispatcher and the whole thing is operated by Daimler Mobility Services?
You could imagine something along those lines.
Meet the van boss
NAME: Volker Mornhinweg
TITLE: Daimler Executive VP, Head of Mercedes-Benz Vans
MAIN CHALLENGE: Developing new business models for a fully digital vehicle lineup.
What are your plans for battery-powered vans?
We will launch the eVito in the second half. The eSprinter comes next year. An electric Citan will come later. Our business is mostly commercial, so that is where our initial focus lies.
How is the globalization process of your division coming along?
Our Sprinter is already a global model. We build it from scratch locally in several factories on different continents to reduce the delivery time to customers. The Vito is now on a similar level. In the U.S., it is assembled from kits in South Carolina, and sold under the name Mercedes-Benz as the Metris. We consider ourselves as the only truly worldwide operating LCV manufacturer.
You can reach Christiaan Hetzner at firstname.lastname@example.org.
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