Daimler to End Van Production for VW

Daimler AG says it won't renew its 11-year agreement to supply a variant of its Sprinter large commercial van to Volkswagen AG when the pact expires at the end of 2016.

VW, which sells the rebadged van as the Crafter, said in March that it would develop the next-generation model solo.

Daimler disclosed in April that it was in talks with Renault SA about expanding their existing small van partnership to build large vans together. Both companies confirm to Bloomberg News that those discussions continue.

Daimler builds about 150,000 Sprinters its most popular van per year in Germany at plants in Dusseldorf and Ludwigsfelde. The company says it will need domestic capacity that had been allocated to VW when its next-generation Sprinter debuts three years from now. Europe accounts for about 60% of the model's global sales.

The Sprinter also is assembled in Argentina, China, Russia and, from kits, in the U.S. Daimler notes that sales in the American market, where the van is sold under the Mercedes-Benz and Freightliner brands, jumped 19% to 21,500 units last year.

Worldwide Sprinter sales grew 1% year on year to 122,100 units in the first half of 2013. The company says surging demand in China, eastern Europe and Latin America is offsetting a slump in western Europe.