Nobody could accuse Mercedes-Benz Vans of resting easy or lacking ambition.
Take this statement from global head Volker Mornhinweg: “Our vision is to be the most successful van business in the world.”
So what does this mean in the UK, which trails only Germany in terms of registrations volume, with 35,000 vans sold last year?
Steve Bridge, the quotable, opinionated managing director of Mercedes-Benz Vans UK, says Mornhinweg (“the gaffer”), is talking about volume and market share.
Until recently, so was he, with his quote from 2012 (“I confidently predict that by 2016 we will overtake Vauxhall to take second place”) still regularly repeated in the media.
“But now I measure it in customer loyalty, retention and testimonials,” says Bridge. “I’m not interested in what others do, just on our performance. Things will break; it’s how you deal with them.”
His ability to “deal with them” has become much easier since he was handed control for the aftersales operations earlier this year. “Our challenge has been to get people to understand that the aftersales part of our business is as good as the sales side. Now I have responsibility for both, I can promote the holistic solution,” Bridge says.
“If we give customers a good experience, then they would need a reason to change their brand allegiance.”
As usual for Mercedes-Benz Vans, it comes down to countering the dogged perception that its vans are expensive to buy. They aren’t – at least they aren’t when the total cost of ownership is taken into consideration, and this is the point that Bridge is keen to stress.
“It’s not about price: if a vehicle is on the road all the time, why would you change? It’s about uptime,” he says. “It’s about the ownership price per week, per day, per hour – that’s the critical thing, and within that is uptime. For us to command a premium, we have to do a bloody good job!”
Hence the internal KPI of measuring customer retention levels. Success for Bridge is 100% (of course), but in order to get close to that figure he needs his retail network to own and measure it.
Some are already in the high 60s and 70s; others need to improve. “We are only as good as our retailer network – and ours is becoming more van dedicated,” Bridge says.
“A strength of our brand is that our retail partners specialise in vans, trucks or both, and they are meeting our demands and needs. Van operators have the right to be properly looked after by the brand and the dealer network. And as a brand we are here to provide guidance. If they choose to go and buy something else, that’s up to them, but at least we have done our bit.”
New technology initially developed for cars will help Mercedes-Benz Vans and its retailers further improve uptime levels. Called Mercedes Me, it enables the vehicle to share information with the retailer, owner and leasing company to proactively address maintenance issues.
The smartphone-access system is scheduled to be launched to vans with the new Sprinter in 2018 and will also be available as a retro-fit plug-in for existing models at the same time, possibly sooner if testing goes well.
“On vans it means that you can see where the vehicle is and what state it’s in regarding mileage, fuel, oil and brake pad wear,” explains Bridge. “It will alert you of an impending breakdown and it will revolutionise the way a business conducts itself from an aftersales perspective.”
He adds: “If a customer doesn’t tell us their vehicle is off-road, it’s hard for us to manage it; this technology will tell us.”
A recurring criticism of manufacturers that produce both cars and vans has been the lengthy delays between technology introduced to cars and its eventual roll-out to vans.
Mercedes-Benz has shortened the time gap between the two, evidenced by its lead in introducing safety systems such as lane departure warnings, collision prevention and blind spot assist – plus its development of van-specific safety technology like crosswind assist.
The reason, says Bridge, is down to the level of shared components and wiring between its cars and vans.
“It isn’t a question of whether we delay the launch of features; it’s about the affordability,” he adds. “In cars, people pay a premium for gadgets. In vans, it’s not as popular, although the whole industry is having to raise its game due to duty of care. We look at customer needs and specify a vehicle to meet those. We don’t look at the cheapest price to steal business away.”
Bridge is critical of the residual pricing guides for not taking safety equipment and other add-ons into consideration when setting their values, claiming with typical vigour that they are “stuck in the dark ages”.
He explains: “Take the auto gearbox. It should be a benefit, but it’s seen as a negative for residual values in the second hand market – it’s bizarre. Also speed limiters, they aren’t seen as a benefit by the residual providers.
“I’m raising the bar by still putting them on as standard.”
The manufacturer is also taking RVs into its own hands with the launch of an approved network to handle greater volumes of used vans. Pre-owned vans are ideal for customers who might not need, or be able to afford, a new van. “They want a solution and they have a budget. If the solution is out of reach, it could mean a nine-month-old van instead,” says Bridge. “It also dovetails into RVs.”
Mercedes-Benz Vans registered 13,726 in the first half of the year, up a little under 1.5%; order take is up by more than 1,000, according to Bridge, while chassis cabs are “sold out”.
Citan and Vito are responsible for the growth, up 20% and 33% respectively, while Sprinter is down just under 7% year-on-year.
Reliant on its three-model line-up since the launch of the Citan three years ago, by the end of 2017 Mercedes-Benz Vans will also offer a pick-up for the first time, based on the Nissan Navara. Available as double-cab only and with four- and six-cylinder engines, it will be pitched against the Volkswagen Amarok. “I’ve seen it and it’s an extremely attractive piece of equipment. It finishes off our portfolio,” says Bridge.
Back to the present, and supply constraints have eased this year after a self-imposed limit placed by Bridge on volumes in 2015. “Last year we took the decision to do fewer vehicles to help other countries out and we sold out of every van we had,” he says. “We’re EU-centric, especially with many customers operating internationally. I balance UK ambitions versus European supply.”
Since he stopped poring over the monthly registrations data, growth has continued unabated. He puts it down to a more focused attitude.
“If we knew the market was up 2% and we were up 2%, then we could take our foot off the gas. Not knowing the market makes us want to do more and it removes the unnecessary pressure of wanting to beat others in sales,” he says.
Focusing on aftersales and service levels also removes the temptation – indeed, the need – to chase volumes.
“We want to be the best for service levels,” Bridge says. “We want to be viewed as the company to pioneer an overall increase in service levels in the van industry.”