Chrysler Overhauls Its Minivans
A silver Chrysler Voyager rolled off the assembly line at a sprawling factory here Monday as DaimlerChrysler launched its redesigned minivans, hoping to regain ground it has lost in a market it invented nearly two decades ago.
The 2001 models, the first overhaul since 1995, represent huge stakes for Chrysler, the dominant player in the still-growing minivan market. Despite the increasing popularity of sport-utility vehicles, the number of minivans sold reached a record 1.6 million last year.
Chrysler, whose first minivan in 1983 radically changed the market for passenger vehicles, has been the market leader ever since. But it has seen its minivan sales in North America decline after 1996, when a series of well-designed competitive models began to hit the market.
With 15 such rivals now on sale--notably from Honda, Toyota, Ford and Mazda--Chrysler has seen its market share slip from more than 90% to about 35% in the U.S. market this year.
There is no dramatic new styling on the latest generation of Chrysler products, a strategy some have criticized. The design is slightly more angular, with flared tire wells, more rounded rear pillars and bigger headlights.
“You don’t screw around with the industry leader. You don’t want to do something radical,” said Ralph Sarotte, general manager for Chrysler’s minivan operations.
With the Voyager, Caravan and upscale Chrysler Town and Country accounting for an estimated one-third of Chrysler’s profit, they are crucial to the success of the recently merged German American company.
“Minivans are the biggest cash generator probably for all of DaimlerChrysler, and that makes them pretty important,” said James Hossack, vice president of the Tustin-based automotive marketing firm AutoPacific and a former product manager for minivans at Chrysler.
Town and Country sales are up 38% so far this year, but the Dodge Caravan, the volume minivan, is down 4.1%. Meanwhile, double-digit gains have been racked up by Ford’s Windstar and the Toyota Sienna. Honda’s Odyssey is up 148%, and the Mazda MPV, which was redone last fall, has soared 629% over last year.
“Import-loyal sedan owners drove Chrysler minivans because they were the gold standard,” said a marketing official for one of GM’s van products. “But now there are acceptable imports which are becoming the new minivan alternative.”
The competition boasts good crash-test results and innovative features. The Honda and Mazda minivans, for example, have a third row of rear seats that fold into the floor--an option that Chrysler decided not to include.
Adding such a seat creates a tub-like area that greatly increases interior noise, said Gordon Rinschler, vice president for minivan platform engineering. Designers instead made internal refinements that actually enable occupants to hear each other better, he said.
The engines have been enhanced to 180-230 horsepower, and the vehicles sport power rear and sliding side doors and three-zone temperature controls.
Minivans have lost ground to the endless profusion of new, ever-larger sport-utility vehicles. Their ubiquitousness has also created a backlash by some customers.
“We’ve seen potential minivan customers opt out of minivans and opt into vehicles with three rows of seats like the Durango, Expedition and Suburban,” said Joseph Phillippi, a senior auto industry analyst with PaineWebber in New York. “Then there are the people who don’t want to be seen as minivan moms.”
Although Chrysler didn’t design its vans specifically for families, “We love our soccer moms,” Rinschler said. “But 40% of these cars are purchased by people without children at home.”
The fourth-generation minivans represent Chrysler’s most ambitious launch from a manufacturing standpoint. Major changes at the Windsor, Canada, assembly plant enabled the company to keep building the “old” minivans while it retooled a third line for production of the new model.
As a result, Chrysler says it didn’t lose any production during the changeover from the 2000 to 2001 minivans. In 1995, the last time the minivans were redesigned, the Windsor plant lost 12 weeks.
The net savings in launch costs, Rinschler said, will total about $500 million.
Production will be at similar levels as the last generation of minivans, with about 550,000 a year made in Windsor and in St. Louis, where production begins in October, and another 50,000 in Graz, Austria starting in January for the European market.
The new minivans will start appearing at U.S. dealerships in mid-August. Pricing has not been announced, but is expected to be in the current $19,000-$38,000 range.
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A Big Battle in Minivans
Chrysler created the minivan in 1983. Its minivan sales peaked in 1996 and have dropped off since then because of increasing competition from American and Japanese auto makers. But Chrysler remains the industry leader in the minivan market.
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North American Sales
Chrysler minivan sales in the U.S. and Canada, in thousands of units:
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1999: 597,089
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Market Share
For the first six months of 2000:
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DaimlerChrysler: 34.6%
General Motors: 24.3%
Ford: 20.0%
Honda: 8.6%
Toyota: 7.0%
Other: 5.5%
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Sources: DaimlerChrysler, Autodata Corp.
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