Managing the Financial Side of Commercial Fleets

Vans Update: Surging Sales, Growing Choices

October 2016, by David Cullen - Also by this author

Photo of Transit full-size van courtesy of Ford.
Photo of Transit full-size van courtesy of Ford.

It’s a great year for sales of cargo vans. The National Truck Equipment Association recently revised its 2016 forecast for U.S./Mexico Class 1-3 commercial van sales upward from a previously forecast 7% year-to-year gain up to 10% this year — to be followed by an 8% increase next year.

Perhaps that’s partly because buyers are finding lots more than tires to kick when they check out the latest models.

David Sowers, head of Ram Truck brand marketing, says the Great Recession built pent-up demand, with the average age of vans climbing to 10 years. It now stands at 7 years. “Last year, Class 1-4 vans and chassis sales reached almost 400,000. We expect that to rise by 10 to 15% this year,” Sowers says. “Pent-up demand is being met, and there’s growth in small businesses since 2009 that’s also driving sales. Both fleets and small business owners are buying more vans.”

He says the two largest groups of buyers are delivery and “mobile worksite” operations. Lots more delivery vans are being sold to UPS and FedEx, and Ram has secured a contract for 12,000 units with the U.S. Postal Service.

Ford says total commercial van sales for 2015 were 423,094, including full-size and compact commercial vans, according to Yaroslav Hetman, Ford’s brand manager for Transit, Transit Connect and E-Series. “Year to date through August, the segment is up 16%, with total van sales of 312,705 vs. 268,625 last year.” He says much of that growth is being driven by sales of the full-size Ford Transit, adding that “Ford sold more vans in August 2016 than it has at any other time in history.”

“We are literally selling every van we can build — even with three production shifts and capacity utilization above 100%,” says Joe Langhauser, full-size van product manager for General Motors Fleet. “In 2015, we sold 46,000 Chevrolet Express and GMC Savana cargo vans. In the first eight months of 2016, we’ve sold more than 27,000. Demand has been strong across the board, but we’ve seen an influx of customers who are in the landscaping and catering businesses.”

Mathias Geisen, general manager of marketing for Mercedes-Benz Vans USA, says “sales numbers are steadily increasing and we’re in the process of signing important contracts with fleet companies.” As for this year’s outlook, Geisen says the full-size Sprinter has “a well-established [customer] segment” and the mid-size Metris “continues to build momentum. We knew we’d have a pioneering role with the Metris because the mid-size segment was vacated by the Chevy Astro/GMC Safari a while ago.”

Photo of Chevrolet City Express courtesy of General Motors.
Photo of Chevrolet City Express courtesy of General Motors.

GM’s Langhauser says more than 10,000 Chevrolet City Express compact vans were sold last year and “we’ll be in the same range this year.” He says the City Express, a derivative of the Nissan NV 200, is “an important vehicle for us because the broader our portfolio, the more we can serve as a ‘one-stop shop’ for our customers.”

The Nissan NV200, according to Mark Namuth, senior manager, commercial vehicle sales, is “the right size” for owners wanting smaller, more efficient work vans. He notes that the NV200 body was extended 7.9 inches beyond models sold in other global markets to provide more cargo capacity for North American customers.

Hetman says Ford “invented the compact commercial van segment with the introduction of Transit Connect in 2009. It continues to outsell all the other models that have entered the space. Customers from a wide range of industries, including home security, shuttle and delivery, have adopted Transit Connect.”

Ram’s Sowers points to a lot of down-sizing or “right-sizing” vehicles by customers. “We think our ProMaster City offers a great combination of fuel efficiency and productivity.” He says it’s rated for 28 mpg, offers a payload higher than most light-duty pickups and that “it drives like a car, with a great turning radius and visibility. We sold over 90,000 of these units in 2015.”

Photo of Ram ProMaster City courtesy of FCA US.
Photo of Ram ProMaster City courtesy of FCA US.

Once the right size van is selected, total cost of ownership is the key purchasing consideration, says Ford’s Hetman. “Our full-size Transit offers up to 46% better fuel economy than the E-Series [it replaced] and provides best-in-class gasoline engine maximum cargo capacity of 487.3 cubic feet when properly equipped – up to 75% more than the largest E-Series van. Transit vans also deliver as much as 4,650 pounds of maximum payload capacity.”

“Safety is becoming more and more important, especially when it comes to active safety features supporting the drivers and avoiding accidents and, therefore, also keeping downtime low,” says Mercedes-Benz’s Geisen. “Our vans offer a portfolio of safety features, including Collision Prevention Assist, Attention Assist, Lane Keeping Assist, Blind Spot Assist and Crosswind Assist.”

Hetman says the latest safety features have been incorporated into Ford vans, from Blind Spot Assist in Transit Connect to Lane Keeping Alert in Transit. These features are in addition to traction control, electronic stability control, side-wind stabilization, and the use of high-strength boron steel to reinforce key points around the vehicle.

“Nissan offers telematics, backup cameras, and rear sonar as some of our active safety features,” says Namuth. “We are seeing an increase in the ordering of these active safety features.”

Photo of NV full-sie van courtesy of Nissan.
Photo of NV full-sie van courtesy of Nissan.

GM’s Langhauser says connectivity is playing a bigger role in the purchase decision. “That’s why we leverage the OnStar safety system’s built-in hardware and software to power Commercial Link, a telematics platform that gives access to key information such as location, miles driven and fuel consumption. We also offer the General Motors Fleet Track System, which pairs OnStar with a scalable cloud-based fleet monitoring platform developed by Telogis.” 

Upfitting critical

Smoothing the complex upfitting process is now a key differentiator for marketing vans.

“The sooner [customers] can put a finished vehicle on road, the faster they will see financial returns,” says GM’s Langhauser. “With our ship-through process, upfits can be ordered directly through the dealer. And the GM Upfitter Integration Group can provide technical assistance to the hundreds of upfitters that modify our vehicles.”

The Nissan Commercial Upfit Program offers customers a wide selection of cargo management packages, graphics packages, or cash allowance, according to Namuth. “Our ship-through program offers fleets Nissan-approved upfits at our factory locations.”

Ford offers 64 different configurations of vans directly from the factory, Hetman says. “Through our ship-through upfitter network, the possibilities for customization by leading upfitters are endless.”

Photo of Metris mid-size van courtesy of Mercedes-Benz.
Photo of Metris mid-size van courtesy of Mercedes-Benz.

Geisen says Mercedes-Benz customers are searching for a complete solution in a simple ship-thru process. “Vans with shelving, refrigeration or other popular upfits will be available as a key-ready solution. To assure the highest quality, we work with three major upfitters, AutoTruck, Knapheide and SmartLiner.”

Ram’s Sowers notes that an upfit center is located next to the ProMaster assembly plant “to handle everything from the standard stuff to customized requests.”

Fuels and powertrains

Many fleets are committed to reducing their environmental footprint and fuel consumption, notes GM’s Langhauser. “We also see real potential for small-displacement turbo diesel powertrains in the fleet arena, because they are powerful, durable and fuel efficient.”

Ford’s Hetman says “customers want the power of choice to be able to smoothly flex to the needs of their businesses. This is why we offer two different gasoline powertrains, a diesel engine, as well as propane, CNG and FFV engine options. Also, several upfitters, like XL Hybrids, cooperate with us on hybrid powertrains.”

However, “relatively cheap fuel has diminished the investment that we previously saw in CNG or LNG products,” notes Nissan’s Namuth, “particularly in the infrastructure to support those alternative fuels.”

Photo of GMC Savana courtesy of General Motors.
Photo of GMC Savana courtesy of General Motors.

When it comes to step vans, typically built on Class 4-7 chassis, more than anything electricity is now in the air. Hybrid-electric powertrains are being offered by several step van builders. For example, Freightliner Custom Chassis, which also offers CNG and hydraulic hybrid power, makes a hybrid-electric vehicle chassis for walk-in vans.

Other electric step vans now available include the Workhorse E-Gen, which uses an electric-battery hybrid drive, and the all-electric Motiv Power Systems drive option offered by Morgan Olson on its Route Star walk-in model.

Chevrolet

Chevrolet’s compact City Express offers 122.7 cubic feet of customizable cargo space, a turning diameter of only 36.7 feet, and a payload capacity of 1,500 pounds. Its DOHC 2.0L, I-4 engine with variable valve timing is rated at 131 hp and 139 lb.-ft. of torque.

The full-size GMC Savana and its Chevy Express stablemate offer a 2.8L Duramax turbo diesel and 8-speed automatic on the long and short wheelbase versions of 2500 and 3500 series models. Standard features now include Rear Park Assist and a rear-vision camera.

Mercedes-Benz

The Metris alone fits in the “mid-size” van category, Mercedes-Benz says. The rear-wheel drive truck is powered by a 2.0L four-cylinder gasoline engine, rated for 208 hp and 258 lb.-ft. of torque, mated to a 7-speed automatic. The powertrain, with optional Eco start/stop function, boasts a service interval of up to 15,000 miles.

Ford

Ford’s full-size Transit now comes in 64 configurations, including new 350 regular-wheelbase van, with single rear wheel and 9,500-pound GVWR. The 3.7L engine is now standard on dual-rear wheel vans, which lowers the base price and provides for CNG or LPG power.

Nissan 

The full-size Nissan NV has standard supplemental front seat-mounted side-impact air bags and roof-mounted curtain side-impact air bags for front outboard occupant head protection.  The rear-wheel-drive van can be powered by a 4L V6 or 5.6L V8; both mated to a standard 5-speed automatic transmission.

Ram

The compact Ram ProMaster City is powered by the 2.4L Tigershark I-4 engine, mated to a 9-speed automatic. Its steel unibody architecture cuts curb weight to offer payload up to 1,883 pounds. It provides 131.7 cubic feet of cargo space.

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  1. 1. Matteo Pasquini [ June 20, 2017 @ 12:51PM ]

    When can we see turbo-deisel in the mini cargo vans or even the Cargo vans

 

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