July 8, 2010
FAMILY VALUES RUN DEEP FOR MERCEDES-BENZ AND SPRINTER

A rich commercial vehicle history back over 100 years and in 50 countries, gives Mercedes-Benz convincing knowledge of the work truck business. Welcoming the Sprinter commercial van back is a key part of the company’s strategy for the Canadian market.

In the Mercedes-Benz Museum in Stuttgart, Germany, a display features a commercial van produced by Karl Benz in 1896. The so called “combination delivery vehicle,” was a lightweight truck which today would be called a van. With a payload, including driver, of 300 kilograms and a single-cylinder 2.75 horsepower engine, the unit on display bears little resemblance to todays Sprinter powered by one of the cleanest and most fuel efficient diesel engines available.

What remains evident in todays Mercedes-Benz Sprinter van is its original commercial DNA. More than a million units have been sold worldwide since its introduction. Sprinter has proven its worth to commercial customers around the world. The Sprinter nameplate officially re-joined the Mercedes-Benz group in Canada in January 2010. FVT recently spoke with Marcus Breitschwerdt, President and CEO of Mercedes-Benz Canada about this “family reunion.”

FVT: Please give our readers a brief history of Sprinter since its inception.

MB: “The Sprinter was first introduced in Europe, Asia and Africa in 1995, then in South America in 1996. In 2003, the vehicle began to be sold under the Dodge label in the USA and Canada. The current generation Sprinter was launched internationally as a Mercedes-Benz in 2006, and was then launched in the USA and Canada in 2007 as a Dodge Sprinter even though it featured the identical design, engineering and key product features of the Mercedes-Benz. As of January 1, 2010, the Sprinter commercial vehicle brand officially joined the Mercedes-Benz group in Canada, and Mercedes-Benz Sprinters are now sold and serviced through the extensive existing Mercedes-Benz dealership network across Canada.”

FVT: What advantages does the integration of Sprinter into Mercedes-Benz carry for commercial fleet customers?

MB: “To really appreciate the advantages of this new chapter, it’s important to understand that the core values of the Mercedes-Benz brand have always included commercial business. For a variety of reasons, southern Germany developed a culture of innovation and invention, and is credited with, among other things, the development of the watch industry, the first chain saw and of course the automobile. Because it was not a rich area, people would only buy something that would last because they were “too poor to buy cheap.”

In order to sell in that market, only the best material and knowledge would do. Mercedes-Benz had its beginnings in this crucible of manufacturing. It really was from those principles of building a product of high quality that would last forever, cultivated in the commercial vehicle business, that the origin of Mercedes-Benz luxury and premium associations were founded and are true to this day. Those commercial vehicle origins are central to our understanding of a vocational customer’s need for a tool that will work and that will produce for them.

Given the similarities between Canadian and European economies and the role that the owner operator business plays here, we have a good understanding of the commercial customers mindset and have taken a Canadian approach to the market. The commercial business is all about customization and fast response. It’s all about different purposes and the ability to deliver those commercial solutions quickly and economically. The direct link between Mercedes-Benz Canada and the factory in Stuttgart gives us the ability to modify product immediately. We know what it means to be in business and how important that quick response is to a commercial account.

Another advantage the direct link we have with our factory in Stuttgart is from an order to delivery perspective. Mercedes-Benz Canada is well established in the Mercedes-Benz world since we are one of its top ten markets and our team’s long term tenure here means that we really know our partners in Germany. My family has been in Stuttgart for 500 years. We know the guys. That relationship simply makes things happen quicker compared to an e-mail correspondence between people working from both sides of the Atlantic who really don’t know each other.”

FVT: As the Canadian economy climbs out of recession, many businesses, especially small and medium sized have challenges accessing credit. Does Mercedes-Benz provide commercial financing options for prospective Sprinter customers?

MB: “From a global perspective, Mercedes-Benz is as solid as the Canadian Banks so we didn’t have to stop financing or leasing as some other companies had to do during the economic downturn. We continue to provide our customers with a wide variety of financing options suited to their particular needs. That financing stability coupled with the competitive pricing of the van, starting at $42,900 for the cargo version and fleet incentives for qualified customers result in the Sprinter models being aggressively positioned in their respective segments and representing a solid value proposition for our commercial customers.”

FVT: How have Mercedes-Benz dealers prepared for the unique requirements of selling and servicing a commercial van?

MB: “Our dealers were very receptive to bringing the Sprinter to Canada, even before it was considered by Germany as a potential market. In fact, a number of years ago one of my predecessors, a Canadian, left his role of President of Mercedes-Benz Canada to become worldwide head of sales and marketing for the van division in Stuttgart so the link has always been pretty close.

When the opportunity arose to bring back Sprinter under the Mercedes-Benz roof, our dealers jumped at it. The Sprinter is now sold throughout our network. All our dealers had adhere to specific standards, install the special hoists, hire the right people for sales and service. As you know, if you want to sell and service commercial vehicles you have to have understand the product, but more than that you have to have the sensitivity and understanding for the business you are serving. You have to know how a plumber’s business works or how a courier operates. The sales force needs to be sophisticated and passionate about what they do. We are more than confident that our dealer body and their commercial van experts are up to the task.

Our dealer network has been built by people with a great passion for technology and vehicles; they have embraced the inclusion of Sprinter into their businesses very enthusiastically. In fact, many of our dealers are small business owners and have ordered Sprinters for their own commercial applications.”

FVT: Commercial customers require durability, reliability, flexibility and low cost of ownership for vehicles. How does Sprinter meet these needs?

MB: “The value proposition with Sprinter begins with the initial cost in the low $40,000 range and continues with best-in-class service intervals. Combined with the durability of the vehicle and the stellar fuel consumption of the vehicle, these provide commercial customers with a product that comes out of the blocks with a tremendous value for money.

The Sprinter is powered by the 3.0 litre BlueTEC V-6 turbo diesel engine that produces 188 hp and 325 lb-ft torque. The BlueTEC technology optimizes fuel consumption and reduces emissions, resulting in one of the world’s cleanest diesel engines which is already in compliance with the EPA 10 standard. As we discussed earlier, one of the hallmarks of commercial business is the need for customization. With three basic vehicles available, cargo van, passenger van and cab and chassis; and multiple body lengths, heights and weight ratings, there are 15 basic models of Sprinter vans available to meet the unique requirements of customers as diverse as the van itself.

An important component of a low total cost of ownership with any vehicle is its residual value. Residual value is made up of many components but two that are critical are the quality of the product and how it is remarketed. It has been established that the Sprinter is a durable and rugged product and has a lot of service left in it after four years on the road. That can’t be said of a number of other commercial vans. From a remarketing perspective, we will use our expertise with the Mercedes-Benz Canada Certified Pre-Owned program to maximize our customers’ returns when they need to replace their Sprinter by offering attractive financing options to second tier buyers, and managing the remarketing process through our dealer network to ensure our residuals remain, as they are today, rock solid.”

FVT: Recognizing Mercedes-Benz stress on world-wide commercial vehicle applications, does Mercedes-Benz have any plans to expand  commercial offerings in Canada?

MB: “Mercedes-Benz has a full range of products in its van division; Sprinter, with its different wheelbases and heights being an excellent example of a Mercedes-Benz product designed specifically for commercial applications. However, there are others. For example, at Christmas our family went to Germany so our kids could visit with their grandparents. While I was there I drove the Mercedes-Benz Vito, one of our smaller vans, to get a sense of how perhaps it could work in Canada. While there are no plans to bring that vehicle to Canada at the moment, I can assure you that whenever we see a need coupled with a feasible business case, we will ensure that this product is introduced in the Canadian market.

If you look at the very successful launches of the B-class and the smart car, small engines for the C-Class and the variety of diesel engines we have here, you will understand that Mercedes-Benz Canada has a great track record of identifying a market need and filling it with quality solutions.

For us it is very important to continue to create a Canadian portfolio that suits the market. Sprinter is just the start of that for the commercial side of our business here. Whatever fits and pays off for the customer, you can trust that we will be considering it.”