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Can Chrysler Keep Its Grip on the Minivan Market

Can Chrysler Keep Its Grip on the Minivan Market

By TCC Team's avatar TCC TeamTCC Team March 28th, 2008

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It should be a time to celebrate over at Chrysler. After all, the automaker’s two cross-town rivals have effectively abandoned the long-lucrative minivan market, leaving the Chrysler Town & Country and Dodge Caravan the only two remaining domestic offerings.

Unfortunately, despite the launch of highly-reviewed, all-new 2009 minivan models, Chrysler is watching its share of the critical segment plunge. Together, sales of its two models have dropped a whopping 12 percent since they were updated, last year, notes a report in today’s Detroit Free Press.

Why is the proverbial $64 question. The Michigan maker would prefer to put the blame on its move to scale back low-profit daily rental and other fleet sales, as well as the decision to abandon the short-wheelbase version of the Town & Country and Caravan models.

Perhaps, but there are other factors at play, analysts and observers tell TheCarConnection.com. For one thing, Chrysler has been taking hits for quality snafus, notably in the April issue of the influential Consumer Reports magazine. And it doesn’t help that while General Motors and Ford have dropped out of the minivan race, key Asian competitors have only ramped up their attack on the segment.

In a stunning surprise, Honda briefly overtook Chrysler on the sales charts, late in 2007, though the American maker retained the lead for the full year.

It doesn’t help that minivan sales, as a whole, have dipped by double-digit numbers for the last two years in a row. A Chrysler spokesman recently posted a review, on the company blog, insisting it’s not time to “write off minivans,” but increased foreign competition, along with the overall declining market, certainly is leading Chrysler officials to rethink their options.

In recent months, Chrysler officials have announced plans to scale back their overall line-up, eliminating weak models like the PT Cruiser Convertible. And Vice Chairman Jim Press has asserted that a critical corporate goal is to better differentiate what are now look-alike products shared by divisions such as Chrysler and Dodge. Despite different accessories, that pretty well describes the Town & Country and Caravan minivans.

For the time being, it seems, Chrysler will have to re-jig its marketing campaign to rebuild momentum for the struggling minivans, a move almost certain to be accompanied by hefty new incentives, during the upcoming Spring selling season.

Longer-term, however, some observers, the Free Press noted, are wondering if Chrysler just might drop one of its current minivan offerings, opting to switch to a different, more youth-oriented “people move” design, in line with Ford’s new Flex model. Which Chrysler model would go? The Dodge Caravan has traditionally been the high-volume package, but its sales are slipping, while the higher-priced Town & Country is faring unexpectedly well in the marketplace.

One thing is clear, Chrysler can’t afford to become an also-ran in the huge market segment it created, nearly a quarter century ago. But finding the key to a turnaround in the minivan market won’t be easy.

We Drive Chrysler's Town & Country. (3/28/08 Enlarge Photo It should be a time to celebrate over at Chrysler. After all, the automaker’s two cross-town rivals have effectively abandoned the long-lucrative minivan market, leaving the Chrysler Town & Country and Dodge Caravan the only two remaining domestic offerings. Unfortunately, despite the launch of highly-reviewed, all-new 2009 minivan models, Chrysler is watching its share of the critical segment plunge. Together, sales of its two models have dropped a whopping 12 percent since they were updated, last year, notes a report in today’s Detroit Free Press. Why is the proverbial $64 question. The Michigan maker would prefer to put the blame on its move to scale back low-profit daily rental and other fleet sales, as well as the decision to abandon the short-wheelbase version of the Town & Country and Caravan models. Perhaps, but there are other factors at play, analysts and observers tell TheCarConnection.com. For one thing, Chrysler has been taking hits for quality snafus, notably in the April issue of the influential Consumer Reports magazine. And it doesn’t help that while General Motors and Ford have dropped out of the minivan race, key Asian competitors have only ramped up their attack on the segment. In a stunning surprise, Honda briefly overtook Chrysler on the sales charts, late in 2007, though the American maker retained the lead for the full year. It doesn’t help that minivan sales, as a whole, have dipped by double-digit numbers for the last two years in a row. A Chrysler spokesman recently posted a review, on the company blog, insisting it’s not time to “write off minivans,” but increased foreign competition, along with the overall declining market, certainly is leading Chrysler officials to rethink their options. In recent months, Chrysler officials have announced plans to scale back their overall line-up, eliminating weak models like the PT Cruiser Convertible. And Vice Chairman Jim Press has asserted that a critical corporate goal is to better differentiate what are now look-alike products shared by divisions such as Chrysler and Dodge. Despite different accessories, that pretty well describes the Town & Country and Caravan minivans. For the time being, it seems, Chrysler will have to re-jig its marketing campaign to rebuild momentum for the struggling minivans, a move almost certain to be accompanied by hefty new incentives, during the upcoming Spring selling season. Longer-term, however, some observers, the Free Press noted, are wondering if Chrysler just might drop one of its current minivan offerings, opting to switch to a different, more youth-oriented “people move” design, in line with Ford’s new Flex model. Which Chrysler model would go? The Dodge Caravan has traditionally been the high-volume package, but its sales are slipping, while the higher-priced Town & Country is faring unexpectedly well in the marketplace. One thing is clear, Chrysler can’t afford to become an also-ran in the huge market segment it created, nearly a quarter century ago. But finding the key to a turnaround in the minivan market won’t be easy. We Drive Chrysler's Town & Country. (3/28/08

Tags: Industry

Posted in: 2007, Dodge, Caravan



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Responses (26 total)

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  1. By Michael Calkins #1, Posted: 3/28/2008

    As a prior owner of three Chrysler minivans, who now drives a Honda Odyssey, the cause for the disappointing sales of Chrysler's new minivans couldn't be more clear. Compared to my 2000 Town & Country Limited, the new models are a giant step backward in both exterior and interior styling. Outside, Chrysler took a graceful and elegant design and replaced it with the box it came in. Inside, flowing organic shapes in soft and pleasing tones were replaced by a cubist nightmare of hard edges, cold colors and acres of cheap plastics. I do appreciate the functional improvements of the new Chrysler minivans, but they don't count for much if I don't like the looks ... and it appears I am not the only one.

  2. By Joe Schulte #2, Posted: 3/28/2008

    Drive before you write it off. Finest minivan Chrysler has built

  3. By Dan #3, Posted: 3/28/2008

    Those who drive the Chrysler mini-vans really know the "Consumer Reports" does not know what they are talking about. Have owned 4 of them, even during the year of the transmission problems, and loved them all. Only left because the family left the house and my wife wanted a Jeep Grand Cherokee.

  4. By Flyerbry #4, Posted: 3/28/2008

    I recently purchased a Jeep Commander for its third-row seat so in a way, Chrysler still got my money. However, in the process I checked out the new Town and Country. The kids loved the two video screens and thought it was the coolest car they had ever seen as they sat on the showroom floor and watched a movie. Myself... I looked at everything else and the plastic alone killed it for me. The expanses of cheap-looking plastics in the interior is mind boggling. The Town and Country is supposed to be upscale; I couldn't put myself through looking at the Dodge version!

    The plastic pockets on the back of the front seats look like a discarded part from a kids big wheel! Yuck! The center stack looks like a definite step backwards - multiple plastic pieces cobbled together to make a place for the radio and AC controls.

    No thanks, I'm extremely happy with my Commander. For the price we added the factory DVD as part of the deal (which works great) and it handles the snow in my area much better than any minivan.

    I walked away disappointed in the fact that Chrysler has completely failed to compete with the competition yet again. We test drove the Toyota Sienna and were unimpressed and liked the Odyssey but it is too pricy once you add any real options to the base vehicle. Chrysler could have charged 800 to 1000 more to include a real upscale interior and still would have been cheaper than the Honda.

  5. By Tom L #5, Posted: 3/28/2008

    I'm impressed that Chrysler has managed to stave off the Japanese this long considering what has happened in the sedan market. The Stow-n-Go feature was a huge coup for them. People were so taken by that clever bit of engineering that it sold them on the vehicle. Success for the automakers isn't going to come from hiring hot-shot CEO's with their $252 million dollar golden parachutes but from putting the right people in place from the bottom up.

  6. By Alan Hasso #6, Posted: 3/28/2008

    The next model of the Odyssey will leave Chrysler in second place in the minivan market and Nissan has yet to become a powerful competitor in that segment.

    I expect chrysler to fall to third place in minivan sales within the next few years.

    We bought an Odyssey minivan after comparing it to the Town and Country.

  7. By  Wayne K #7, Posted: 3/28/2008

    The new for '08 vans are great riding and driving vans. Yeah they did take a small step back in design, but they are still nice looking vans! I do totally agree with everyone on the interior plastics. Very very bad. I think that a little extra time and money could have gone into soft touch materials for the dash and the armrests, it's just all a tad too cheesey!

  8. By Thor #8, Posted: 3/28/2008

    The exterior of the new Chryslers is fine with me. I have not seen their interior, but the prior generation was rather lousy and far inferior to the Odysseys.

    Hondas willalways be a little more expensive to buy compared to similar didges and chryslers, BUT if you add ALL the costs (repairs, fuel, maintenance, etc) AND deduct the (much higher for the Honda, even in % terms) RESALE VALUE, the Honda will always make much more economic sense, AND in addition you will have a far more pleasant driving experience. plus better active and passive safety, a big factor in Minivans.

    SOmebody said he's very happy with the Jeep Commander vs the Chrysler Vans. The commander is basically a slightly larger Grand Cherokee, with a cramped third row. The interior volume is far, far less than the Odyssey or the Chrysler vans (esp. the long wheelbase versions), and the fuel efficiency far, far worse. Plus I'm sure the Commander has a far greater price tag than the minivans. Not the right vehicle if you want to take kids to soccer practice. I'm surprised that $3.50 gas has not hit real hard the owners of such Commanders yet.

  9. By Thor #9, Posted: 3/28/2008

    PS Consumer reports know DAMN WELL what they are talking about, AND in addition they are 100% UNBiased, they buy their vehicles RETAIL and DO NOT accept them as gifts as the enthusiasts mags do,

    and in addition, their reliability data are from 100,000 of private individuals and not cooked up by some spin doctor.

    I found CR 100% accurate in their recommendations BOTH for my Honda Accord 18 yr 2-door 5-speed coupe AND for my BMW 7 series .

  10. By brian #10, Posted: 3/28/2008

    Perhaps if Chrysler had donwsized and built something along the lines of the Mazda5 (of course with a better interior too) it would be viewed as different enough from Honda and Toyota, and also desirable for fuel mileage and handling.

    A smaller size would also appeal to more Europeans, and Chrysler can really use more Euros right about now...

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