Dodge will get Mercedes van

Plan calls for N. America plant

Ford, GM dominate
Ford and GM have locked up the large van market for years, with a combined share of 83.9 percent.
  11 mos. 2001 share
Ford Econoline 37.30%
Chevrolet Express/ Chevy Van 27.9
Dodge Ram Van 10.6
GMC Savana 10.6
Dodge Ram Wagon 5.5
Ford Club Wagon 8.2

Ninety Dodge dealers next year will sell a full-sized Sprinter van built by Mercedes-Benz and badged as a Freightliner.

DaimlerChrysler will begin looking for a North American plant to build commercial and passenger versions.

Offering pricey Mercedes-built vehicles to Dodge dealers could undermine the vaunted Mercedes brand identity. But it’s the quickest way for the company to expand sales of Mercedes full-sized commercial vans in the vast U.S. market.

“Dodge dealers are used to selling the Ram van on price. There will be no deal of the month with Sprinter,” said Tim Reuss, CEO of DaimlerChrysler Vans LLC, the South Carolina sales and marketing company set up in June. “We will have to teach them how to sell Sprinter on its attributes and quality.”

DaimlerChrysler said that the Sprinter, with a base sticker of $26,300, costs about 10 percent more than the competition. That’s similar to the premium pricing of Mercedes-Benz passenger cars.

In addition to a cargo version used for such things as delivery vehicles and service trucks, a model with bare-bones passenger seating will be offered for uses such as airport vans.

The van strategy is complex:

  •  Within four years, both the Freightliner Sprinter and the Mercedes-Benz Vito, the luxurious passenger van sold by Mercedes-Benz dealers worldwide, will be built in North America, possibly in a new factory. Chrysler has excess capacity, but it may be more efficient to build from scratch than refurbish an aging Chrysler group factory.

  •  The Vito will come to some Freightliner and Dodge dealers in the 2004 model year after a major redesign. The Vito is built on the same platform as the Sprinter, but has a more aesthetic shape and has the luxurious trim and upscale equipment of a traditional Mercedes-Benz car.

  • The vehicles will wear “Powered by Mercedes-Benz” badges and have a high-technology diesel engine used in Mercedes cars in sold in Europe. Thus, shoppers can buy advanced Mercedes diesel engines at Dodge dealerships.

    Dodge needs big vans

    The Sprinter and Vito will fill a product gap in the Dodge range. The aging full-sized 3500 Ram Van range, priced at $21,045 for the Maxi-van version, is being phased out at the end of 2002 because of declining sales.

    The segment is led by Ford Motor Co., whose Econoline and Club Wagon had 45.5 percent share of the market in the first 11 months of 2001.

    But DaimlerChrysler is counting on Sprinter product attributes, such as Mercedes-Benz engineering and safety, an independent front suspension, a five-speed electronically controlled transmission and a five-cylinder 2.7-liter common rail diesel engine. The same engine is offered on the Mercedes-Benz C- and E-class cars and the M-class sport-utility in Europe, with better fuel-economy than the competition’s gasoline engines.

    The Sprinter will be offered in three different wheelbases and two heights.

    Search starts in January

    In January, Mercedes-Benz will begin searching for a site to build both the Sprinter and Vito beginning in 2006 with an annual capacity of up to 120,000 units. Consideration is being given to using the Chrysler group’s Windsor, Ontario, factory, which assembles the full-sized Dodge Ram Van, said Rolf Bartke, senior vice president of Mercedes-Benz Vans, the unit in charge of manufacturing and marketing both vehicles.

    “We will probably build a greenfield plant in the U.S. because both Mexico and Canada require a local content of 62 percent in vehicles built in their countries. We aren’t likely to approach that number for our vans,” Bartke said.

    Bartke recently met with Chrysler executives at the Windsor plant to discuss the options.

    A new U.S. factory would require an investment of $1 billion — $700 million for the factory and $300 million for engineering and other costs, said Bartke. About 4,000, new jobs would be created.

    Bartke said the site selection process hasn’t begun.

    The Sprinter is currently built in Germany and reassembled from kits in Gaffney, S.C. The Gaffney plant can’t assemble more than 20,000 units annually, Bartke said.

    M-B has high U.S. hopes

    The vehicles, which are sold everywhere else in the world as Mercedes-Benz models, debuted for sale this year in the United States with the Freightliner badge. The first sales were to FedEx Corp., which asked DaimlerChrysler to export to the United States. FedEx bought 1,900 Sprinters.

    The decision to rebadge the vans as Freightliners — the commercial vehicle unit that makes and sells heavy-duty trucks in the United States — came after extensive research in which potential customers said they didn’t want their business vehicles wearing the Mercedes-Benz name, said Reuss.

    “Florists and cargo carriers said if their customers saw them driving Mercedes-Benz vehicles, they’d wonder if they were paying too much for their services,” Reuss said. “Mercedes-Benz is regarded as more of a luxury brand in the U.S. than it is in Europe, where taxis and even big trucks have the name.”

    Freightliner’s dealer network is also being used to sell the Sprinter. By the end of 2001, 50 Freightliner dealers will have signed franchise agreements, Reuss said.

  • You can reach Diana T. Kurylko at dkurylko@autonews.com

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