Mercedes-Benz Vans has a big year ahead

“More of our customers are sharing our ambition to reduce their environmental footprint and ready themselves for an electric future.”

Mercedes-Benz Vans has a big year ahead, UK sales director Sarah Palfreyman talks exclusively to Van User

Van User: How was 2022 for Mercedes-Benz Vans?

Sarah Palfreyman: Our first year of recovery following the pandemic was not without challenges. We have seen customer demand outstrip supply, but on a positive note, more than 10% of Mercedes-Benz Vans sales were electric, compared to the average market proportion of around 6%.

We have also seen a positive performance in the used van market. The number of vans sold with our Mercedes-Benz Approved Used policy has grown from 35% in 2018 to 77% in 2022. We also saw a 10% growth in customers relying on our dealer workshops to keep their vehicles moving.

VU:  How did your sales split in terms of model?

SP: Sprinter continues to be our top-selling vehicle, followed by Vito models. We are proud of the businesses our large, connected van has been able to support over the last few years, including emergency services, couriers and egrocery, local retail businesses and charities.

However, we cannot ignore the trends, particularly the growing demand in smaller van markets. With the production of the new Citan and eCitan and our private van counterparts, the T-Class and EQT to launch in Spring, we expect to increase sales in this sector.

VU: All manufacturers have been struggling with supply, how was this for Mercedes?

SP: Production capacity, component supply and economic volatility are some of the challenges we and
other manufacturers are still navigating. However, as we move into 2023, we are anticipating lead times to return to a more stable, familiar rate.

VU: How have sales of electric vans progressed and how do you see the UK electric van market?

SP: More of our customers are sharing our ambition to reduce their environmental footprint and ready themselves for an electric future. More than three-quarters (77%) of small businesses we spoke to in 2022 are implementing measures to reduce any negative impact on the environment. The majority (76%) are considering switching to an electric van.

Our results highlighted that, according to SMMT data, the eVito is the strongest-performing vehicle in the retail sector, with a share of 51%. With wider legislative and environmental factors, such as the 2030 Climate Target Plan and Euro 7 emissions standards, we foresee the EV market progressing positively.

VU: How important will the new eSprinter and the eCitan be to Mercedes-Benz Vans?

SP: The eCitan and new eSprinter will significantly increase our electric product offering and will enable us to help make EV a sustainable proposition for more customers. The eCitan will be our first electric small van, offering the benefits customers expect from Mercedes-Benz. That includes up to 30 years’ roadside assistance, (with out-of-charge cover), exemplary safety features, Mercedes me connectivity, a three-year unlimited mileage warranty and an eight-year battery guarantee. It will also bring a level of premium specification to the small electric van category.

The new eSprinter is a big evolution for our large electric van. The model offers three battery variants – the highest of which achieved a real-world test drive of 295 miles. Our offering will include long-wheelbase and chassis variants, with power solutions for bodybuilders.

VU: Are you working with suppliers to provide charging infrastructure for e-van customers?

SP: Mercedes-Benz Vans is working with a range of suppliers, ranging from local dealer partners consulting on electric charging and home charger solutions, through to partners who can help depot and large-fleets electrify their operations. We are trialling these processes to electrify Mercedes-Benz retail sites, allowing us to test and learn before recommending to customers.

Mercedes-Benz recently announced plans for a global high-power charging network across North America, Europe, China and other key markets, to support going all-electric by end of the decade. It will significantly enhance the usability and convenience of our brand’s electric vehicles, differentiate the Mercedes-Benz ownership experience and accelerate EV transformation.

VU: Are your dealers having to change the way that they work to meet the needs of customers?

SP: The automotive industry continues to undergo seismic change, of which electrification is just one factor. Together with our dealer partners, we have invested over £20m into our infrastructure and will continue to increase this spend in 2023 and beyond. Retail sites are being redesigned to ensure customers receive the same, premium experience across all our UK showrooms and training is being delivered to sales employees to make processes more consultative.

We want to ensure we understand our customer’s business and their specific needs, taking into account usage, range, payload, and charging opportunities, to deliver the best service. We also want to make sure our network is honest and transparent, in cases where EV isn’t right for a customer today.

We are rapidly expanding the number of EV technicians qualified to work on all aspects of a vehicle’s high voltage systems – from a routine service, all the way to battery replacement. This will ensure we can give Mercedes-Benz levels of service, even in an
EV world.

We are optimising our Mercedes-Benz Van Online Showroom, which exists alongside our brick-and-mortar dealerships. The platform gives customers the flexibility to make online reservations and payments, with hundreds of new and used vans in one place.

Buying a van is one of the most important purchases small business owners will make, but we know from research that their time is valuable. 37% of businesses we spoke to said being able to buy a van online would save them time and 30% said it would be more efficient for their business.

VU: Will the UK van market be ready for the end of new petrol/diesel sales in 2030 and how could government help?

SP: Whilst there are many challenges for the automotive industry to navigate, I am confident that many of them will be answered by improvements in vehicle technology, legislation and infrastructure before 2030. New products will answer challenges ensuring EV’s better match the capabilities of a diesel van.

At Mercedes-Benz, in addition to the new eSprinter arriving later this year, the 4.25-tonne exemption is already helping EVs to become closer in terms of payload to their diesel counterparts. Within this decade, we will also have an all-new EV architecture called VAN.EA, which will help adoption further.

The introduction of local legislation, including Zero Emission Zones, will mean faster adoption in some areas. Nevertheless, infrastructure will need to be improved if an all-electric future is to be viable. From a public network standpoint, Mercedes is looking to play a part in improving this, but customers, particularly those who operate from depots, may need to invest heavily in order to switch their fleet.

There is an opportunity for the van industry to work together to consider what is needed for our community. Many public charging spaces are not large enough for a long-wheelbase electric van, particularly on-street. Not all van drivers have driveways, so we will be working with industry bodies and our customers to consider how fleets may need to change their operations to fit in with electric vans.

Other potential opportunities that could be explored include:

• Setting minimum standards for charging facilities to take the needs of van drivers into account

• Additional grants or tax breaks for those businesses installing EV infrastructure at depots

• Standardise benefits for electric vans. For example, in some cities electric vans can use bus lanes and have subsidised parking

• Maintain grants for electric vans to help offset the higher production costs of batteries.

VU: How do you see 2023 for the van market and for Mercedes-Benz?

SP: 2023 will see the van industry launch a lot of new vehicles, including the Mercedes-Benz Citan, eCitan, T-Class, EQT, the new eSprinter and an eVito facelift. This growth in new vehicles should see the used van market settle down and continue the strong growth of electric vehicles. With more digital tools, like our Mercedes-Benz Vans Online Showroom, we can expect to see more customers researching, reserving or buying vans online.