Demand For Euro-Style Work Vans Is Surging

Ford Transit work van is efficient and roomy

Ford stopped making its iconic E-150 cargo van in 2014, replacing it with the larger and more stylish Ford Transit van that it has been building for European customers for a decade. The result? Demand for the new Euro-style work vans is surging. Sales of the high-top version of Ford’s Transit, favored by delivery companies, have been so strong that Ford cut a deal with three rail companies, including Norfolk Southern Corp., to raise the shelving on 400 railcars so shipments of its taller models could keep up with demand.

“We have been running these vans on European roadways for years and much of what drivers want over there they want here in the U.S.,” Yaro Hetman, who runs Ford’s Transit marketing efforts, told NASDAQ.com recently. “They like easy drivability, fuel efficiency, tighter turning radiuses and that is what I think make these vans attractive.”

FiatChrysler has been seeing a similar increase in demand for its Euro-style ProMaster vans. Bob Hegbloom, head of FiatChrysler’s Ram division, said the van boom has been fueled by the economic upturn and demand for more capable vehicles for work and weekend getaways. “Vans used to be rear-wheel drive [and] only powered by big V-8 engines that hurt their fuel efficiency,” Mr. Hegbloom said. “Today they are front-wheel drive, making them easier to handle and are powered by a V-6, which is more economical.”

Ram’s Euro-style ProMaster sales have nearly doubled this year through August over the same period in 2014. The company began production of the ProMaster two years ago. JD Power & Associates says the new large vans are highly profitable for the companies that make them. The California research firm estimates that, since 2010, prices of large vans are up 27.6% while incentives are down 15.3%.

“One of the reasons why we are looking for this type of this vehicle is the high fuel efficiency,” said Time Warner Cable Inc. spokeswoman Shelley Loo. The telecommunications giant replaced some older panel vans with 500 diesel-powered Transit vans and improved fuel economy by 47%, she said.

The vans are ripe for customization. Industry experts estimate commercial buyers spend between $2,000 and $3,000 on accessories for storing equipment, and consumers often spend the same amount for camping or other updates. Adrian Steel Co., a Michigan-based commercial vehicle outfitter, recently invested $4.7 million to open a site in Kansas City for such work. Recently, a line of Ford’s Transit Connect vans belonging to a local cable company were lined up bumper to bumper waiting to be outfitted.

Other companies are paying attention and want in on the party. Germany’s Daimler will offer U.S. buyers its smaller Metris van shortly and has starting making its Sprinter in Charleston, South Carolina, to take advantage of soaring demand. General Motors Co still sells the old-style Chevrolet Express and GMC Savana work vans, but introduced its first European-style City Express last December, which is based on a Nissan NV200.

More room, better fuel economy, easier handling. What’s not to like?

 

Steve Hanley

Closely following the transition from internal combustion to electricity. Whether it's cars, trucks, ships, or airplanes, sustainability is the key. Please follow me on Google + and Twitter.