Daimler and Renault in new van tie-up

Mercedes-Benz has created an air of some confusion over its future van strategy with Renault.

While on the one hand, Daimler AG and Renault SA continue to identify new projects together as they expand their global cooperation to include commercial vans made in Japan, in Europe the picture for Daimler’s large vans is less clear.

Renault's alliance partner Nissan Motor Corporation will supply Daimler with the NV350 Urvan which will be sold under its Mitsubishi Fuso brand in selected export markets.

"We will continue to seek out new projects together that make sense for all partners," Daimler CEO Dieter Zetsche said at a news conference at the Frankfurt Motor Show.

The manufacturers have gradually added projects to their three-year-old cooperation, originally focused on Daimler's Smart city cars and Mercedes-Benz delivery vans.

Last year, the companies agreed to jointly develop a four-cylinder gasoline engine and to license Mercedes-Benz transmissions for Nissan's Infiniti luxury brand to be made in Mexico.

According to Ghosn, the ramp up of a joint engine production in Decherd, Tennessee, is “on track” for production start in mid-2014. The engines will be used in the mid-sized Mercedes-Benz C-Class and new Nissan Infiniti cars.

Claimed Ghosn: “Mercedes and Infiniti are not competing for the same customers. Cross-shopping between the two brands is limited."

The two partners are also looking into possible cooperation in the large van segment with the result that Daimler AG’s contract to ‘rebadge’ the Mercedes-Benz Sprinter for Volkswagen AG will cease at the end of 2016.

“The decision to end production for VW was independent of any possible cooperation with Renault-Nissan,” said Zetsche.

Already, Daimler and Renault have been cooperating. Daimler's smaller Citan delivery van is one which the German company adapted from Renault's Kangoo. Citan vehicles are produced on the Kangoo production line.

And according to Ghosn, the two manufacturers are also considering joining forces on future compact car models.

“The review continues and no decision on a possible joint production in Mexico has been made,” said Ghosn.

                            Realigning production

Mercedes-Benz Vans claims it is already creating the conditions that will enable it to “master the challenges” associated with the model changeover of the Sprinter large van in a few years’ time. It is also realigning the Sprinter production strategy for the long-term.

To enable the division to respond to anticipated future growth, the company will not extend its manufacturing agreement with Volkswagen AG in relation to large vans after the contract expires as scheduled at the end of 2016.

“A reissue of the cooperation with Volkswagen to produce its Krafter vans is not intended,” the company said. The predecessor of the Crafter was the Volkswagen LT which VW shared with MAN. The LT originated in 1950 as the Type 2.

Daimler added that Sprinter is the most successful model produced by Daimler’s van division, and the vehicle lends its name to an entire van segment. Around 150,000 Sprinters are currently built each year.

According to Volker Mornhinweg, head of Mercedes-Benz Vans: "Both partners have seen benefits from the long-lasting cooperation. With the next Sprinter, however, which is currently in development, we will ultimately be dependent on the production capacities that we have currently made available to Volkswagen. That’s why our employees will only produce our own brands in the future."

Europe is the most important market for Mercedes-Benz Vans, according to the company. It accounts for 60 per cent of total sales.

As part of the "Vans goes global" business strategy, the growth markets of South America and Asia, as well as the Russian market, are increasingly being opened up through local sales and production activities. For example, since 2007 the Sprinter has been produced in Argentina and in China (since 2011).

Since July 2013, the Sprinter has been manufactured also in cooperation with its partner company GAZ in Russia. In addition, the van has been assembled from CKD kits in the US since 2010. Not so long ago, GAZ sought to make vans designed and built by LDV in the UK.

As a result, the Sprinter’s global production network is already positioned to accommodate future growth and produce a new generation of vehicles.

Mercedes-Benz’s manufacturing contract with Volkswagen AG for large vans began in 2005 with the model changeover for the Sprinter. By the end of 2012, around 280,000 large vans had been produced for the Wolfsburg-based company at the Mercedes-Benz plants in Düsseldorf and Ludwigsfelde. The agreements governing the manufacturing of large vans for VW were fixed to run until the end of 2016 from the outset.

The Crafter (VW’s previous van was known as the LT and shared a contract with MAN) is produced on the same line as the Sprinter (in a deal that is the reverse of the Citan/Kangoo) but the VW vehicles have that company’s engines with either Mercedes-Benz manual transmissions or VW’s DCT automatic.

But Mercedes’ officials might well ask themselves: Is the quality associated with the manufacture of quality cars in Germany also appropriate to the manufacture of large vans where such high standards (and costs) might not be appreciated or even needed.

And there is another question: What happens to Vito? Will Mercedes-Benz continue to 'go it alone' with Vito or is there scope with Ghosn to entertain yet another joint venture with Renault? Could there be another two-way deal on the cards whereby Mercedes-Benz and Renault jointly market the next-generation Renault X82 medium van both as a Trafic and as a Vito? Time will tell.

Mercedes officials nevertheless claim that thanks to the Sprinter, the company is market leader for medium and large vans in the 24 nations of the EU, with a market share of 18.1 per cent in 2012.

In North America, the German car and van maker claims Mercedes-Benz Vans is growing twice as fast as the market. This success is partially due to its dual-brand strategy: the Sprinter is sold as either a Mercedes-Benz or Freightliner-branded vehicle. In 2012 sales rose 19 per cent to a total of 21,500 units.

At the end of April 2013, Mercedes-Benz Vans celebrated the world premiere of the new Sprinter.

All of which raises two questions: what happens to the van agreements between Renault and General Motors and where will VW manufacture its ‘next generation’ Crafter?

For its part, Renault appears to be running with the hare and hunting with the hounds, for it already has an agreement with General Motors whereby the two companies are collaborating on two sizes of van – the Renault Trafic and the Master.

A GM spokesman explained: “A new contract was signed between the two companies (Renault and GM) to support the next generation Vivaro and so we are locked in to that. As for the Vivaro and Movano, they are covered by separate contractual arrangements just like the Combo with Fiat.”

The Movano is Vauxhall/Opel’s version of the Renault Master.  

He added: “Movano is a fundamental and an important part of our commercial vehicle line up and there is no intention to stop that.  Our current commercial vehicle range provides us with the best selling overall line up in the UK.  Fleet business is great and we continually lead in the retail segment too.”

And as for the next generation Crafter, the future of where that will be manufactured, and what form it takes, remains to be seen. •