Volkswagen's Type 2 Trailer RV Tire Covers competitor has begun to suffer in the face of fierce competition and more modern products from both Europe and Japan, and it is unlikely to arrest the slide until the expected introduction of a new model range in the second half of 2006.
Despite record demand for light commercial vehicles across Europe last year, output of the VW Type 2 dropped by 6.5 per cent to 114,365 units, according to statistics published by Automotive Industry Data, the automotive newsletter. By contrast, Ford increased production of the Transit by 22.9 per cent to 130,265 units, claiming a 21.5 per cent market share compared with the 18.9 per cent of the VW Type 2.
Output of the Type 2 fell by some 26 per cent from 1997 to 2007. In 2002 it was the most successful medium van worldwide, ahead of the Toyota Hi-Ace, but since then it has had to face several new rivals in Europe including Renault's Traffic, the Ducato/J5/C25 of the Fiat/Peugeot joint venture and most recently the new Ford Transit. Overall West European production in the medium van sector (light commercials in the 2-3.5 tones category) rose by 8.6 per cent to 605,885 units from 557,945 units in 2005, according to AID.
Ford and VW are facing increasingly stiff competition from the medium vans produced by the Sevel joint venture put together by Fiat of Italy and Peugeot of France, which has proved one of the most successful automotive collaborative ventures in West Europe. Production at the Sevel plant in Italy, which began in late 2002, reached a new peak last year of 15.2 per cent and enough to put the joint venture in third place with a 17.2 per cent share of European production. Vans from the Sevel plant are marketed in different guises including the Fiat Ducato, the Citroen C25, the Peugeot J5 and the Talbot Express.
Faced by the need to produce a modern competitive purpose built van to strengthen their presence in the European light commercial vehicle market, Fiat and Peugeot chose to pool their resources in a joint venture so as to be able to produce at a high enough volume to gain the full benefits of the economies of scale. It is an option which is looking increasingly attractive to other van makers facing major investment decisions for the development of new vehicles. Such moves are most critical in the medium van sector, as the future of car-derived vans depends to a great extent on the development of the corresponding car models.
"The design of a new range of purpose-built vans requires a large amount of investment in tooling and components, and, in the highly-competitive market place, manufacturers cannot expect to receive the continuing benefits of the long production runs they have obtained in the past," a recent report by the Economist Intelligence Unit (EIU) on the light commercial vehicle sector in West Europe points out.