Mercedes-Benz will ditch the Metris van from its U.S. lineup late next year and exit the midsize commercial van segment.

The automaker told dealers in a memo Thursday it will discontinue sales of the four-cylinder gasoline engine that powers the Metris and Sprinter commercial vans.

"As a result, the Mercedes-Benz Metris and gasoline Sprinter models will no longer be offered in the U.S. market after Q3 2023," the brand's U.S. vice president of commercial vehicles, Nicolette Lambrechts, said in the memo obtained by Automotive News.

Mercedes-Benz will continue to offer the four-cylinder diesel Sprinter model, which a dealer said accounts for about 75 percent of the nameplate's U.S. sales.

Available in passenger and cargo configurations, the midsize Metris has failed to gain traction in a market that prefers either large or small commercial vans but not in-between.

Mercedes has delivered about 60,000 Metris vans in the U.S. since its 2015 debut, according to the Automotive News Research & Data Center. During that period, Mercedes sold more than four times as many Sprinter vans here.

The U.S. government has accounted for the bulk of Metris orders this decade. In 2020, the U.S. Postal Service signed a multi-year contract for about 30,000 of the vehicles.

That year, Metris sales peaked at nearly 15,000, with the Postal Service accounting for about 80 percent of them, according to a source familiar with Mercedes' commercial vehicle business.

"We are going to honor our contract with the U.S. Postal Service," the source said. "Once we do that, we're bailing out."

Mercedes-Benz has sourced the four-cylinder gasoline engines for its commercial vans from Nissan's Decherd, Tenn., engine plant since 2015. The engine production will end next year as Mercedes drives toward an all-electric lineup by early next decade.

Mercedes is axing the Metris as the luxury automaker trims a U.S. model lineup that has nearly doubled to 15 nameplates since 2000. Mercedes is dropping the A-Class in the U.S. and told dealers it will replace the C-Class and E-Class coupes with the two-door CLE nameplate.

"As customer and market requirements continuously evolve, our strategy is to optimize our product offering," Lambrechts noted.

The Metris, sold globally as the Vito, was launched as a key weapon in Mercedes' push into the commercial vehicle segment here. It was offered as a complement to the larger Sprinter van and as an alternative to Ford Motor Co.'s segment-leading Transit Connect small cargo van.

"The Metris occupies this unique space in the middle," AutoPacific President Ed Kim told Automotive News. "The Metris is in a segment of one."

That might have proven too niche for the U.S.

The Sprinter and Transit Connect on opposite sides of the segment "pretty much address the various commercial van needs," Kim said.

"And with the Sprinter offering so many configurations, including light-duty ones, Metris hasn't achieved sufficiently healthy sales volumes to justify its presence in the lineup," he said.

Last year, Metris received a face-lift that included design updates and new features in infotainment and driver-assistance systems. The nine-speed automatic transmission became available in all Metris variants for the first time.

But Mercedes retailers complained that the Metris is overpriced and lacks features, such as all-wheel drive, offered by competitors. Mercedes offered a stripped-down version of the Metris to lower the price point.

A Mercedes dealership executive who requested not to be identified said the Metris does not deserve to carry the Mercedes badge.

"There's nothing luxury about it," he said. "It drives louder than a Toyota."

The slow-selling Metris also lacks the plump margins that Mercedes models typically command.

"We would give all the dealer performance bonuses, all the profit to the customer," to get the vans off the lot, the source said.

Even as Mercedes ditches Metris in the U.S., the automaker is doubling down on its commercial workhorse model. The U.S. is the second-largest market for Sprinter vans, after Germany.

The Sprinter received a new all-wheel-drive system and switched fully to a four-cylinder lineup of gasoline and diesel engines for 2023.

Meanwhile, a battery-powered U.S.-made version of the Sprinter van will arrive in the second half of next year. The eSprinter will be built on the EVA2 platform and be available in two wheelbases.

Production for the eSprinter will begin at Mercedes' van factory in Charleston, S.C. A few years ago, Mercedes converted the facility from what had been a kit factory into a full-fledged vehicle assembly operation.

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