Small Vans Mean Big Business For Ford and GM

With gas prices inching up steadily, full-size SUVs and trucks have started to fall out of daily drivers’ favor to make way for smaller and  compact crossovers, larger station wagons, and downsized trucks. For the average citizen, foregoing the extra space or additional towing capacity was an acceptable trade-off for a few dollars saved at the pump; but for businesses and working professionals who relied on their larger vehicles, the higher gas prices only rubbed salt into the wounds as there was no real alternative to the ubiquitous cargo van.

For years, the Ford (NYSE:F) Econoline or the Chevrolet (NYSE:GM) Express dominated the van segment. Gracious cargo space and a no-nonsense approach to creature comforts have made the vans a top pick for businesses and private enterprises. However, the V8 engines that the vans were packing under the hood are running afoul with evolving emissions standards, and the cargo vehicle industry is seeing a shift.

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Like the consumer exodus to smaller, lighter, and more fuel efficient cars, businesses are now looking toward newer vehicles that feature a sleeker, smaller profile that has been popular in Europe for several years. Since Daimler AG first brought the Sprinter van across the Atlantic, the higher-efficiency cargo vans have been catching on and building momentum.

“Guess what? The world has changed,” Claus Tritt, who heads Daimler’s U.S. commercial-van business, said in an interview with Bloomberg. “We are no longer the oddball,” he added, referring to the rather conspicuous nature of the Sprinter when it first hit American roads.

Not only are the fuel-sipping vans becoming big business for the automakers, but the cargo carriers boast some of the highest margins in the industry and are helping propel profits as the housing and industrial markets get back on their feet. Together with pickup trucks, the two vehicle classes are becoming some of the strongest performing segments in the industry.