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Mercedes sells 20,000 Sprinter vans to Amazon


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Gabriella Coppola, Bloomberg  /  September 5, 2018

Daimler AG is emerging as a beneficiary of Amazon.com Inc.’s booming package-delivery needs, with the e-commerce giant ordering 20,000 of the German automaker’s Mercedes-Benz Sprinter vans.

Mercedes, which just opened a new plant in North Charleston, S.C., started producing Amazon-branded vans for the online retailer’s Delivery Service Partner program, which enables small businesses to lease vans for deliveries through third-party fleet management companies.

Amazon is assisting small businesses across the U.S. by providing discounted vehicles, fuel, insurance, uniforms and access to delivery technology, the Seattle-based company said in June. The bulk purchase of Sprinter vans makes Amazon the largest buyer of the model, Mercedes said in a statement Wednesday.

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Wonder what the price was? I've seen state bid quotes of around $20k for a base Transit, so I suspect Daimler had to bid under that. Then again, these are for lease to Amazon's subcontractors, so maybe Amazon is just taking a cut as middleman in the deal and Daimler is making a hefty profit?

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5 hours ago, Maxidyne said:

Wonder what the price was? I've seen state bid quotes of around $20k for a base Transit, so I suspect Daimler had to bid under that. Then again, these are for lease to Amazon's subcontractors, so maybe Amazon is just taking a cut as middleman in the deal and Daimler is making a hefty profit?

True. I do commercial fleet sales and some these discounts can be very steep for fleets, municipalities and even non-profits who get govt funding.

Sometimes middlemen get them too. For example companies that sell or install Trane products can use a Trane fleet code on single purchases.

Not sure if it was mentioned but was Ford in the bid?

We are seeing alot of companies converting over from Sprinters to Transits. Based on these customers feedback. The Sprinters are great and reliable but being a Mercedes they are very expensive to maintain as they rack up miles close to 100k. Even for things like brakes, suspension or front end parts. Not every Mercedes dealer services them and a Freightliner dealer maybe be even harder to find.  Meanwhile some companies run their Fords to 200k miles or more before replacing. 

However if these Sprinters are being leased then long term maintenance may not be an issue especially if the lease terms are good.

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Amazon makes big commitment during grand opening of U.S. Sprinter plant

Derek Clouthier, Truck News  /  September 5, 2018

CHARLESTON, S.C. – Today’s grand opening of the new Sprinter plant in North Charleston was met with some added good news for Mercedes-Benz Vans, with Amazon announcing it will require 20,000 units over the course of the coming year.

Pricing for the 2019 Sprinter vans was also released, with starting costs ranging from USD$33,790 for a four cylinder, 2.0 liter gasoline option to the 4×4 crew van, six cylinder, 3.0 liter turbo diesel Sprinter at USD$56,790.

Mercedes-Benz Vans invited media from Canada, the U.S., and overseas to Charleston, S.C., for a tour of the newly opened manufacturing plant, as well as a test drive of the new Sprinter, which in addition the Mercedes-Benz model is available as a Freightliner brand.

The 2019 VS30 Sprinter will for the first time be built in the U.S. for the North American market, which, as Volker Mornhinweg, head of Mercedes-Benz Vans, pointed out, is the van’s second largest market in the world. Of the approximate 400,000 units the company sold worldwide last year, around 44,000 were destined for the U.S. and Canada.

Mornhinweg said North American demand for the Sprinter was a big factor into why the company chose to call South Carolina home for the new plant.

“Building a full-scale production plant in this market makes perfect sense,” said Mornhinweg during the grand opening ceremony. “With the new, state-of-the-art production site in South Carolina, we will be able to supply our customers in North America even faster and with more flexibility in the future. The new plant in North Charleston combines our global expertise and experience resulting in a state-of-the-art facility in every respect. It is a valuable asset that completes our global production network. Our priority at Mercedes-Benz Vans during the planning process for this facility was maximum flexibility. This enables us to react in an agile and anticipatory manner to current developments and customer desires. Additionally, it guarantees excellent quality within our proven, standardized production system.”

The company invested approximately USD$500 million into building the plant. Currently, more than 900 people are employed at the location, with the number expected to rise to 1,300 by 2020.

Amazon’s need for 20,000 Sprinter vans comes on the heels of the company’s announcement of its new Delivery Service Partner program, where anyone can apply to become an Amazon-branded delivery driver and can lease up to 40 vans to deliver packages from warehouses to homes.

“We’re proud to partner with Mercedes-Benz Vans to contribute to local economies through the order of Amazon branded Sprinter vans produced at their new plant in North Charleston,” said Dave Clark, Amazon’s senior vice-president of worldwide operations. “Thanks to the tremendous response to Amazon’s new Delivery Service Partner program, we are excited to increase our original order of branded Sprinter vans to 20,000 vehicles so new small businesses will have access to a customized fleet to power deliveries of Amazon packages.”

Clark said the program, which was announced last June, is expanding to more U.S. cities, but at this time has not been rolled out in Canada.

The 222-acre Sprinter plant includes a multitude of facilities, including a body shop, paint shop, final assembly, autonomous transport systems, paperless documentation with RFID technology, and onsite training.

New features

In addition to the gasoline option for 1500 and 2500 cargo, crew, and passenger vans, the 2019 Sprinter offers several new features, including 15 seats for 14 passengers plus the driver, increased GVWR on the 2500 and 4500 models, a seven gear transmission standard on six cylinder diesel models, increased cargo space and usability with loadable wheel arches, interior roof rack, and shelf above roof rim, and the Mercedes-Benz User Experience with optional seven or 10.25” touchscreen multimedia display.

Gasoline units come with a nine-speed, automatic transmission.

Another optional piece of technology is Mercedes Pro connect with three bundles available – optimized assistance, efficient fleet management, and data interfaces for vans.

Test drive

Two years ago, I was in Charleston for the groundbreaking ceremony of the new Sprinter plant. Late last year, I was invited to Germany to learn about what Mercedes-Benz had in store for the 2019 Sprinter. And now, I’ve revisited South Carolina to finally test drive a vehicle the company has been touting for some time.

As you would imagine, driving a Mercedes-Benz vehicle is a joy for someone more used to less costly makes. It is a smooth ride, and a comfortable one at that.

The navigation system – from what I have heard from those who test drove the vehicle in Amsterdam a few months back – has been improved. My drive was just shy of an hour-and-a-half, and the navigation system was responsive and gave fair warning when I needed to make a turn.

The turning radius on the van is impressive, which makes it easier to maneuver around corners and fit into parking spaces.

If I could change something on the 2019 Sprinter, it would be the distance the dashboard gauges are from the driver. I am just over six feet tall and still had to stretch out to reach the onboard display to use the map and adjust the air temperature. I can only imagine for some shorter drivers it would be more of an issue.

The interior also seemed to lack an obvious place to rest your phone while driving. Several vehicles these days have a rubber, no-slip spot on the dash where cellphones can be charged or used as a navigation device, but I found myself just having to toss my phone on the floor beside me or on the passenger’s seat.

On the driving side of things, though the ride was smooth, on two occasions the active lane keeping assist kicked in – and I really don’t think it needed to, as I was well within my lane at all times, but I digress – which felt strange on the steering wheel. The best way to describe it is that it vibrates when activated and made me feel like I had lost traction with the road, which was not to my liking. Almost like driving on icy roads and starting to slip…not fun.

I’m sure this is something you would get used to, however.

Other than that, the new Sprinter really focuses on driver comfort, as well as versatility for various applications.

The particular model I was driving was the six cylinder diesel offering set up as a passenger van. With a top speed of 90 mph, it had 190hp, 324lbs./ft. of torque, a max GVWR between 9,050-9,480lbs, and a towing capacity of 5,000lbs.

I did not get the chance to drive one of the Freightliner branded models, though several Mercedes-Benz executives say the two are identical and the different brands are more for customers in markets that are more suited for driving a Freightliner compared to a Mercedes-Benz vehicle.

Following the test drive, we were given a safety demo that highlighted three key features – rear cross-traffic assist and distronic cruise control, both optional features, and brake assist, a standard on all new Sprinters.

Rear cross-traffic assist comes in handy when backing out of a parking space with limited visibility. The vehicle recognizes objects in its path and will come to a halt when another vehicle passes by when it’s backing out of a parking space.

Distronic cruise control maintains a safe traveling distance from other vehicles while in cruise control – approximately four vehicle lengths during our demo, but depends on speed. This helps take some of the stress away from driving, as the driver will always know the Sprinter will maintain a safe distance from the vehicle in front.

The standard brake assist feature is useful when driving in urban or heavy traffic areas, particularly when a driver is looking for an address or business and may not be paying full attention to the road. The feature will recognize a vehicle in front and brake or stop to avoid a collision.

From a technology standpoint, the Sprinter is fully equipped.

In addition to the features mentioned above, the vehicle boasts assistance with blind spots, parking, traffic signs, crosswind, driver attention, and Internet in the car.

I’m well aware how all of these functions are intended to increase safety, but for me, it does take some getting used to. As I mentioned, the lane keeping assist function felt strange, as did the crosswind assist. Driving over several bridges in the Charleston area, when a crosswind blew, I could feel the Sprinter make a correction. Experienced drivers are used to making these kinds of adjustments on their own, and it is still strange to feel the vehicle do it for you.

But this is the way of the future.

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Mercedes-Benz Vans receives Amazon order for 20,000 new Sprinters at plant opening ceremony

Jeff Crissey, Commercial Carrier Journal (CCJ)  /  September 5, 2018

After a $500 million investment and two years since breaking ground, Mercedes-Benz Vans officially opened its first North American Sprinter van production facility in North Charleston, S.C.. The new plant coincides with the launch of its all-new 2019 Mercedes- and Freightliner-branded models and currently employs 900 people. Company officials said that number will grow to 1,300 employees when production fully ramps up in 2020.

“Building a full-scale production plant in this market makes perfect sense,” said Volker Mornhinweg, head of Mercedes-Benz Vans. “The North Charleston plant is agile and adaptive and can respond even faster to market changes and customer needs,” adding the new production facility will significantly reduce order lead times as it builds a product dedicated to U.S. and Canadian markets.

North America has become the second-largest market for Mercedes-Benz Vans since the company introduced the Sprinter to the region in 2001. Last year, the company sold more than 400,000 vans worldwide. In North America, Mercedes-Benz Vans sold 44,000 units in 2017, a 3 percent increase from 2016 and a record-high for the company.

During the ceremony, Amazon gave plant employees and state and local dignitaries in attendance more cause to celebrate when it announced it has increased its current order of 5,000 new Sprinters to 20,000 units.

“We conducted a very thorough vetting process of the different options available in the marketplace,” said David Clark, Amazon’s senior vice president of worldwide operations. “For a variety of reasons, we found this was a great partnership and the right vehicle for us at the right time, with the right kind of flexibility and the right partner to launch with. We think it is well-timed that this facility is opening now as we are expanding our operations significantly in this way.”

Mornhinweg said the company launched a new customer co-creation initiative started three years ago, replacing a “one-size-fits-all” mentality with a tailored approach for multiple industries.

Clark added the two companies worked closely to develop a tailored solution to help Amazon optimize parcel delivery. “What we’ve found is an organization that is very customer-focused and very willing to get in and think about what could change and how things could evolve for our use case in a way we find very positive,” he said.

Clark said the vast majority of its new vans on order will go into its Delivery Service Partners (DSP) program, a new offering announced in June aimed at helping entrepreneurs build their own businesses delivering Amazon packages while leasing vehicles from a fleet management company to help keep startup costs low.

“[DSP] is pulling together a great vehicle and great cost structure… giving them access to use our scale to keep their cost structures predictable and low-cost,” said Clark.

Response for Amazon’s DSP was overwhelming, giving Amazon the confidence to expand the offering to hundreds of new cities.

“The biggest challenge for most small businesses is how to get more volume into the business,” said Clark. “We take care of that piece for them. We think we’ve put together a great package to ensure their success and it will enable thousands of small businesses in the United States.”

The 2019 Sprinter features the new Mercedes PRO fleet management software and MBUX infotainment system, two platforms designed to increase visibility, communication and productivity. “The new Sprinter is not only a van, but a digital tool,” said Mornhinweg. “It’s a perfect fit that a company at the forefront of technology and innovation will become our first major customer.”

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12 minutes ago, Red Horse said:

I would have to believe MB gave them some sort of unbelievable warranty package. Can you imagine what a high percentage of these "contractors" will be doing to these vehicles knowing residual value is not their problem.  I think ford was wise to stay away from this deal.

I don't know Bob, I would have seen value in the product visibility for Ford.

That's like justifying Ford avoiding the USPS contract, in which case I refuse to believe Ford isn't capable of being the ultimate supplier.

In WW2, Ford jumped at the chance to produce a version of the Willys "MB" (known as the GPW), and again in the 1960s it created the M151 "Mutt" from scratch. Also of mention was the Ford M8 Greyhound. And Ford did them for one reason.....profit. Why not the USPS contract?

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9 hours ago, kscarbel2 said:

I don't know Bob, I would have seen value in the product visibility for Ford.

That's like justifying Ford avoiding the USPS contract, in which case I refuse to believe Ford isn't capable of being the ultimate supplier.

In WW2, Ford jumped at the chance to produce a version of the Willys "MB" (known as the GPW), and again in the 1960s it created the M151 "Mutt" from scratch. Also of mention was the Ford M8 Greyhound. And Ford did them for one reason.....profit. Why not the USPS contract?

Kevin you might be right about visibility, but does Ford need it with respect to the Transit?  Seems to me the Transit has already earned the respect of the market as the best in class.  And we know all about Ford's view of chasing small margin deals.  Its all about the average transaction price or so it seems.

And as for the USPS, as I think we have kicked around, mind boggling that The Transit and even the FCA vans should have been considered by the USPS.  Given the fact they don't have to be engineered for right hand drive-they've been doing that for years-and with some body mods, how much could the PO have saved.-a fortune I would bet.

 

 

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USPS' problem is they want too many features so the big makers aren't interested, and I wouldn't be surprised if no one is able to meet all of USPS' requirements. Might makes sense for USPS to "punt" and buy something like the BOF RWD Ford Explorer based step vans they bough after the LLV contract ran out.

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