Mercedes-Benz Vans is the third-largest manufacturing arm of Daimler after cars and trucks, generating 12.8 billion euros in revenue with an operating margin of more than 9 percent last year. Despite the success, Daimler executives knew the unit was too reliant on Europe, which accounted for more than two-thirds of the division's 360,000 sales in 2016. To make the division more global, Mercedes has added the X-class pickup as another core product to sell alongside its flagship Sprinter large delivery van and the smaller Vito and V-class models. Mercedes Vans boss Volker Mornhinweg spoke about the importance of the X class in an interview with Automotive News Europe Correspondent Christiaan Hetzner.
How did the X class come to be?
Shortly after the Lehman Bros. collapse in 2008, we realized just how risky it was to be a manufacturer focused primarily on the European market. It's rare that all regions of the world undergo a crisis at the same time. Latin America, for example, was relatively untouched by Lehman's failure. Out of this knowledge we developed a business strategy called Mercedes-Benz Vans Goes Global with the goal of establishing a market presence worldwide.
What did you look at?
We analyzed where we could expand our portfolio globally. Down-market there's big demand in Asia for vans smaller than our Vito, but these are extremely price sensitive so that didn’t work for us. Above the Sprinter, there's the light duty trucks segment, but our colleagues from Fuso already serve that with the Canter. The one attractive segment left – on a global scale – was the midsize pickup segment.
What was the next step?
It was simply a matter of determining what kind of pickup. Full-size trucks are popular mainly in North America and the segment is highly profitable, but three top dogs [General Motors, Ford and Chrysler] control more than 90 percent of the market. We settled on the midsize segment, which is a global product segment.