The large vans favored by delivery drivers and tradespeople across Europe may blend into the background, but for automakers, they are pure gold.
Vans have high profit margins -- up to 10 percent or even more, analysts say, comparable to a well-equipped SUV. Their development costs are lower and less technology-intensive. And the European market -- forecast to grow by double digits by 2021 -- is relatively stable and predictable.
Since 2016, Ford, PSA Group and the Renault Nissan Mitsubishi alliance have created stand-alone light commercial vehicle (LCV) business units to take advantage of cross-brand synergies, increase profits and ultimately take market share from rivals in an intensely competitive market.
“Automakers have always known that LCVs are a high-margin product,” said Thomas Glendinning, an analyst with BMI Research in London. “It’s a very valuable market to be pushing into. You can definitely see it on a global scale.”
Those profits are hard-won, however. Fleet buyers and individual business owners are ruthlessly focused on two things: total cost of ownership and practicality, analysts say.