Friday, May 4, 2012

"The minivan is here and the minivan won’t ever go away.”

To some extent, Chrysler created the minivan and the minivan saved the company.
Minivans get a lot of grief and end up as the butt of a lot of jokes, but for Chrysler they're no laughing matter. They've been the top in the field essentially since their introduction and rise to the top of the priority lines of Chrysler, reports Businessweek:


Almost 30 years after the minivan was introduced, after attacks from all sides, Chrysler Group LLC remains on top. Now, CEO Sergio Marchionne will have to decide how best to sustain the success.

So far, the moves made by Marchionne, who is preparing to merge Chrysler with majority owner Fiat SpA (F), have paid off. The choice he faces now: whether to merge Chrysler’s two remaining minivans into one and whether to dramatically redesign one or both. Either way, Marchionne and his dealers are committed to Chrysler’s signature product.

“I don’t care if the minivan market shrinks as long as I’m King Kong in it,” Chuck Eddy, a Chrysler dealer in Austintown, Ohio, said in a phone interview. “That is Chrysler’s attitude, too. The minivan is here and the minivan won’t ever go away.”

Just four years after a 1979 government bailout, Chrysler Chief Executive Officer Lee Iacocca introduced the Dodge Caravan, and minivans soon joined Ram pickups and Jeep sport- utility vehicles as the company’s most important product lines.
“When people think Chrysler, is minivan a product that comes to mind? The answer is ‘absolutely,’ ” Alexander Edwards, president of the automotive practice at San Diego-based Strategic Vision, a marketing and branding company, said in a phone interview. “Most everybody that is in the minivan segment recognizes Chrysler as the creator.”
 And even after pioneering the minivan as a market, they stayed dominant:
Chrysler has kept the title despite an onslaught of entries from Ford, Toyota Motor Corp. (7203), Honda Motor Co. and the predecessor of General Motors Co. (GM) (GM) Ford and GM eventually quit the segment, and Chrysler has claimed at least 40 percent of the U.S. minivan market every year since 2007.

Marchionne is closing in on deciding whether Chrysler still needs two entries for the U.S. minivan market. He led a complete overhaul of Chrysler’s lineup in the 19 months after its U.S.- backed bankruptcy in 2009, introducing 16 new or refreshed models. The Jeep Grand Cherokee and Chrysler 300 sedan have drawn praise from critics, including Consumer Reports.

The revamp has led to 11 months of U.S. sales gains exceeding 20 percent and made Chrysler the biggest gainer of market share through April. Deliveries climbed 33 percent in the first four months, boosting market share by 2 percentage points to 11.6 percent. 
 Nowadays, they're looking to use lower prices for more features to attract buyers:
Buyers paid an average price of $32,735 for the Town & Country in March, less than the $33,032 paid for Toyota’s Sienna and $32,949 for Honda’s Odyssey, according to Edmunds.com data. Grand Caravans sold for $27,151 on average.

Chrysler offers more-generous incentives on minivans than its competitors. The average incentive per Town & Country sold was $3,106 in March and $2,236 for Grand Caravan, compared to Sienna’s $1,650 and Odyssey’s $974, according to researcher Edmunds.com.

Those four models have accounted for 90 percent of minivan sales so far this year in the U.S., where, over the past decade, many buyers have switched to car-based SUVs, such as the Chevrolet Traverse and redesigned Ford Explorer. 

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