The Minivan: State of the Market
Since the minivan was introduced in the US back in 1983, The Chrysler Group's minivan offerings have has consistently outsold those from other manufacturers. Even today, the Chrysler Town & Country and Dodge Caravan combine to give Chrysler a leadership position in the minivan segment.
That leadership position is now at risk from a host of challenges, ranging from the emergence of the crossover segment, declining sales, the unattractive (albeit somewhat undeserved) image of the minivan in popular culture, and a new crop of competitive minivans hitting the market from rival manufacturers.
- Visit the State of the Minivan Photo Gallery
- Visit the 2008 Dodge/Chrysler Minivan Preview Gallery
To use an already overused cliché, it's not always easy at the top.
Crossovers and Market Share
Chrysler minivans are also starting to show their age, lacking many of the new features that competitive models offer. On top of this challenging situation, the emergence of the crossover vehicle segment has some automakers proclaiming that the death of the minivan segment is near, and crossover vehicles are the future.
"Some of these comments [about crossovers replacing minivans] are coming from automakers who haven't done well in the minivan market," says Ann Fandozzi, Chrysler's Director of front-wheel-drive product marketing. "The market leaders in this segment -- Chrysler, Toyota and Honda -- have invested substantial resources in their minivan product lines, and will continue to do so."
Fandozzi also points to internal Chrysler data that shows crossovers aren't replacing their minivan sales to a significant degree. While crossover vehicles may currently be one of the hottest segments in the auto industry, Fandozzi doesn't see crossovers as a direct threat. "We're seeing more people move up to crossover vehicles from cars or SUVs rather than from minivans."
In addition to the potential threat from crossover vehicles, some pundits have argued that the days of the minivan are numbered, with flat sales and changing market conditions pushing the minivan towards obsolescence. (See "Death of the Minivan" for more information.)
According to US minivan sales data from the Power Information Network, nearly all minivan automakers -- with the exception of the Honda Odyssey and the Hyundai Entourage (which is an all-new model) -- are showing a decline in sales from last year. High gas prices in mid-2006 undoubtedly had an effect on the sales of larger vehicles, as some consumers opted for smaller, more fuel-efficient choices than thirsty SUVs and full-size trucks.
Although minivans sales are down for the year when compared to 2005, Chrysler is confident that the slump is temporary. "We're seeing some people delay purchases due to economic uncertainty, but we expect sales to recover by the end of the year.” says Fandozzi.
A closer look at the current state of the minivan market in the US (see chart) provides some other interesting details. While overall year-to-date (YTD) minivan sales for 2006 are down when compared to 2005, the top four minivan manufacturers -- Chrysler, Dodge, Toyota and Honda -- account for about 74% of the market. Dodge and Chrysler vans combine to give the Chrysler Group a 40% market share and a strong leadership position. That leaves 10 models to compete over the remaining 26% of the market, a prospect that has undoubtedly contributed to the recent (or forthcoming) discontinuation of the Ford Freestar, Mercury Monterey, Mazda MPV and the Pontiac Montana SV6. Fighting over the scraps in a competitive market isn't an attractive proposition for some automakers, a situation that may lead one or two other manufacturers to throw in the towel on the segment as well.
- Visit the State of the Minivan Photo Gallery
- Visit the 2008 Dodge/Chrysler Minivan Preview Gallery