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DEALERS can make more money by selling Transit vans than by flogging 38tonne artics. That's the essence of a message behind the introduction of Ford's new Transit range.
Ford recognised the purpose-built van market as the money spinner and has sold two million Transits at a record profit per vehicle.
Other manufacturers have since turned their attention to this market sector and some, like General Motors, have altered their attitude to the lighter vehicle sector. GM must have followed Ford's lead, but, I think, has hit the market too late.
Speaking at the launch of Bedford's Suzuki-based microvan in November, J. T. Battenberg, then chief executive and general manager Bedford, gave three reasons why Bedford decided to focus its attention on the high-volume van sector. The first was that the van market in Europe is reviving.
Second, the van market has the advantage of an in-built fast rate of sales response unlike the specialist truck market, where long-term capital investment factors tend to dominate purchasing decisions.
The third factor, which he described as crucial, is that the van sector provides opportunities for putting much needed new products quickly into production, when resources are severely limited as a result of heavy losses sustained since 1979. Bedford's three brand-new van programmes are the direct result of this strategy.
Is there any sign of this GM approach succeeding? The US giant can't be too happy if its UK van performance is anything to go by. In the British light van sector in 1985 (a segment which now includes microvans as well as carderived types) the GM figures, according to SMMT statistics, improved from 18,395 in 1984 to 19,662. But its two main rivals, Austin Rover and Ford, did better; the former lifting registrations from 18,772 to 21,928 and the latter recording 30,656 against 28,591 in 1984.
And the situation for GM was no better in the purpose-built van sector (to 3.5 tonnes). Admittedly, again Bedford's figures improved from 13,314 to 14,644 but Freight Rover did much better moving from 14,645 in 1984 to 16,894 while one of the importers in particular — Renault — jumped to 10,321 from 7,253 the previous year and Mercedes improved to 8,372 from 7,481.
Market leader, Ford with 43,956 registrations pegged back from 45,120 in 1984, hut this was not caused by the sales lost by the Transit but was the result of a heavy drop in South Africanbuilt pick-ups. These were down to 3,365 from 5,230.
Just why Ford remains the market leader and why the new Transit is likely to succeed was made clear at the new Transit's press launch. Simply put, Ford knows more about this particular market sector than anyone else in Europe.
Critics have remarked that the new Transit looks like Renault's Trafic/Master and is not far removed from Fiat's Ducato. Is this surprising? These are the competitors that have given Ford the strongest competition in the European market.
IMPRESSIVE ANALYSIS
No one who attended the new Transit's press launch could have failed to be impressed by Ford's analysis of the market. The picture of the European market situation with vans painted by Ford of Britain's director of car sales, Ernie Thompson. An analysis of the market indicates three main categories of vans, he said: light vehicles — mainly car-derived vans like the Fiesta and Escort; medium commercials — including vans like the Transit of up to 3.5 tonnes gross and also one-tonne pick-up trucks and four-wheel drive vehicles like the Land Rover; and heavy commercials — vehicles of more than 3.5 tonnes gross.
In 1984, the total market in Europe amounted to just over 1.3 million vehicles made up of 419,000 light, 641,000 medium and 249,(XX) heavy vehicles, he said. So medium commercial vehicles constitute the largest segment in the European commercial vehicle industry with some 73 per cent of vehicles falling in the onetonne (49 per cent) and two-tonne (24 per cent) categories — Transit size.
The market in Europe has grown by around 200,000 units, or by one third, over the 10-year period. Moreover, it has been remarkably constant over the last seven years at around 650,000 units. And Britain is the largest single market for medium commercials in Europe, said Thompson, representing 20.4 per cent in 1984. Germany is next with 20 per cent, France third with 17.5 and Italy fourth with 10.4.
In Britain in recent years around 48 per cent of all commercials have been mediums, 32 per cent car-derived and the heavy vehicles share is now just 20 per cent, he commented. He forecast that the market will remain very strong at about 135,000 units for 1986 at least.
His thumb-nail sketch of the opposition is also relevant. The last fivt years, he said, show that Bedford has only recently managed to improve slightly. This was thanks entirely to thc introduction of the Isuzu-based Midi, but the Midi had been largely responsible for the reduction in CF sale: he commented. Freight Rover had also improved during the last couple of year since the introduction of the larger and heavier Sherpas.
Turning to VW, he remarked that although the Transporter had been improved, it and the newer and larger LT range have not halted the gradual decline in VW's overall share. Meanwhile, Mercedes has been slowly improving. Talbot with the Express has found considerable success since its introduction in 1982 and Renault, with the Trafic and the larger Master, has shown steady improvement, overtaking both Mercedes and VW.
With purpose-built vans like the Transit it is a numbers game; productio volume is everything for the manufacturer in terms of profitability. And for the user, if maximum use is achieved, a vehicle of this type can be very cost effective — obviously not more so than a fully utilised 38-tonner, but nevertheless capable of achieving useful profit margins on the right sort c work.
by George Malcolm