Cargo Vans
International buys Workhorse, Sprinter grows, and traditional vans with gasoline engines remain popular.
Tom Berg
Senior Equipment Editor
Consolidation seems to have come to the walk-in van-building business, which is abuzz with the news that Workhorse Custom Chassis is being acquired by International Truck & Engine. But the move, at least as now envisioned by the two companies, is more synergy than anything, with Workhorse continuing to operate on its own while drawing on International's financial and technical strengths. International, in turn, will benefit by having more access to a niche market.
Meanwhile, in the cargo van business, sales continue at a healthy pace as a strong general economy produces goods and services that require the type of transportation vans are good at. Ford and General Motors are the two remaining competitors in the traditional panel- and window- van and cutaway cab-chassis markets. DaimlerChrysler has phased out its long-running B van and now sells the Sprinter, a larger European-sourced van with a smaller powertrain.
The Big Three all report sales increases over last year, while their products continue into the 2006 model year largely unchanged, except for the addition of diesel power to GM's line. GM and Ford also supply chassis and/or complete vehicles to makers of buses and motor homes, and generally lump all sales together in a market totaling about 350,000 units a year. Ford says sales of panel vans has declined by about 5% while cutaway cab-chassis sales are up about 7%. This reflects a continued trend toward higher capacity trucks, with cab-chassis units fitted with high-volume "boxes" and other specialty bodies.
Sprinter's Growing
Thus DaimlerChrysler seems to have entered a growth market with its comparatively large Sprinter van, now sold by Dodge and Freightliner dealers. They sold about 16,000 Sprinters last year and the pace so far this year is up by a third. The Sprinter's 2.7-liter Mercedes turbodiesel is less than half the displacement of gasoline and diesel engines used in American-style vans, yet delivers sprightly performance along with almost double the fuel economy. Initially, Sprinter's engine had some EGR valve problems - but that's been fixed, DC says - while the bigger engines in some Ford and Chevrolet/GMC vans enable them to carry more weight and tow much heavier trailers.
After this year, Sprinter will carry only Dodge badges. A few Freightliner dealers have cultivated sales to a variety of commercial users, from limousine services to expedited freight haulers, but they'll have to obtain Dodge Truck franchises if they want to continue selling the vehicles. Ford and GM continue to watch the Sprinter and are prepared to bring in their own Eurovans if necessary.
But along with DC, Ford and GM also offer smaller, more economical vans, including minivans, to those who don't need high volume or weight capacities. GM's latest product is the retro-styled Chevy HHR window van, which it is promoting as a utility truck as well as a snappy, customizable people mover. It is a compact vehicle with a four-cylinder engine, but it would be ideal for delivering flowers, catered food and other products that might not go out in big amounts but have to go now.
Workhorse Possibilities
Fruits of the International-Workhorse deal may well be sweet for buyers of walk-in vans, who can almost count on an expanded Workhorse line from which to choose, along with greater competition that helps hold prices in check.
Workhorse builds the successor to General Motors' P chassis and uses GM gasoline engines in many of its products - and says it will continue to do so. It will probably begin using more International diesels, as well. Its major competitor is Freightliner Custom Chassis, which is eyeing the development with understandable interest.
International, the operating company of Navistar International, is buying Workhorse and a support organization, Uptime Parts, from GVW Holdings Corp. Workhorse builds its truck, bus and motor home chassis in Union City, Ind., and has administrative, sales and engineering offices near Chicago and Detroit. Uptime distributes parts from facilities in West Chicago, Ill., and Reno, Nev.
GVW still owns Union City Body, a neighbor to Workhorse, which says it will continue to work with that supplier in the building of an integrated walk-in van. GVW also owns Autocar, the trash truck builder, which will continue to assemble Workhorse's R series motor home chassis. There could be more cooperation among all entities related to this deal.
Gasoline Lives
Light- and light/medium-duty vans constitute a major holdout for the gasoline engine. More than 90% of cargo-van buyers choose gas engines, according to Ford, which has long offered diesels in its heavier Econoline trucks. Large fleets that have used gasoline engines for years are reluctant to begin using diesels because they represent something new for everybody to learn about, Ford says. And advances in gasoline-engine design have made them increasingly desirable, lessening the need for a conversion to diesel.
General Motors expects to continue selling nine out of 10 G series vans with gas engines after production of a Duramax diesel version ramps up this year. After an absence of several years, GM reintroduced diesel power to its G vans for the '06 model year. A GM dealer in the East said he welcomes the diesel but commented, "I sell 200 vans a year and I don't think I ever lost a sale because I didn't have a diesel" to offer.
Workhorse, which offered Cummins and AM General-built diesels until 2004 and has begun using International's V-6 diesel, finds that many buyers prefer its GM gasoline engines. Initial production of its new W42 chassis is with 4.8- and 6-liter Vortec V-8s, which are powerful, clean-burning and durable, and deliver fuel economy that approaches a diesel's, the company contends. It reports that dieselized fleet customers are taking another look at gasoline, especially for urban use where citizens object to diesel fumes.
Economics favor gasoline, Workhorse asserts. A gasoline-powered walk-in van costs $5,000 less than one with a diesel. The gas engine will last 200,000 miles or more, and is inexpensive to rebuild or replace when it does wear out. Gas especially makes sense in low-mileage operations, where somewhat more fuel consumption will never equal a diesel's upfront premium, especially now that diesel fuel costs more than 87 octane regular gas. A diesel engine will be even more expensive in 2007, when stiffer exhaust emissions limits will require more costly equipment, making gas even more attractive.
Freightliner Custom Chassis Corp., which builds heavier platforms than Workhorse and offers only diesel engines, disputes the pro-gasoline talk. It points to lower cost-per-mile figures for anyone keeping trucks on a long-term basis, which most operators of walk-in vans do. Later this year it will issue detailed arguments in favor of diesel.
Preparation of engines for the '07 emissions limits is proceeding on schedule, with initial test engines to be ready by late this year and compliant engines ready for sale in time for the deadline, FCCC says. As of now, its chassis will come with Cummins ISB and Mercedes-Benz 900 series diesels with cooled exhaust-gas recirculation; in '07, they will have particulate traps. FCCC claims to build two-thirds of all platforms used for walk-in vans.
Workhorse's enthusiasm for gasoline engines belies its new ownership by International, a major builder of diesels. Its highest volume product is the Power Stroke V-8 diesels it supplies to Ford for use in vans and pickups. International's version, with less horsepower but still strong torque, is the VT 365, which it uses in several medium-duty trucks.
With International's new ownership of Workhorse, this V-8 diesel might be introduced in heavier Workhorse chassis, complementing the VT 275 V-6 that's now offered. In fact, working on the V-6 deal is what got executives of the two companies talking about the acquisition, Workhorse says.
Cargo Vans continued...
