The Minivan’s Hold on Market--and America’s Psyche--May Be Waning
While light-truck sales are booming--surpassing passenger-car sales last month for the first time since World War II--the tried-and-true minivan is struggling to hold its own.
No one is suggesting that it is going to go the way of the station wagon, the once-ubiquitous suburban family car that the minivan has all but replaced in American driveways.
But the growth potential of the maturing minivan--first driven into the nation’s consciousness in 1984 by Chrysler--is diminishing as its image of being the soccer mom’s vehicle of choice wears thin.
This is no small matter given the place the minivan holds in the American psyche. Originally pitched as the “magic wagon,” the minivan is regarded by some automotive historians as the most culturally significant vehicle of the last two decades.
It helped save Chrysler Corp. from extinction in the mid-1980s. Along the way, the minivan’s success created a profitable, high-volume segment that was fully exploited by Detroit.
Despite the name, there is nothing diminutive about a seven-passenger minivan. It has fed America’s obsession with big vehicles, paving the way for hulking sport-utility vehicles and extended-cab pickup trucks.
Most important, the boxy, rectangular minivan has changed the way Americans regard their personal transportation. They want to take the family room on the road, and the minivan makes it easy with removable seats, countless cup holders and a plethora of storage bins.
“As a people mover and for pure utility, there is nothing that can beat it,” said Wesley Brown, an analyst with Nextrend, a Thousand Oaks auto consulting firm.
Yet the minivan is facing a midlife crisis. It is struggling with the same affliction that drove a stake into the heart of the wood-paneled station wagon--image, or, more appropriately, the lack of one.
Auto makers are trying to figure out how to attract a new generation of minivan buyers without upsetting the formula that made it a hit. It’s a delicate balancing act with an uncertain result.
The biggest hope for the minivan is graying baby boomers. Detroit hopes that a good portion of these buyers will want luxury minivans as they get older or choose them over full-size sedans when they tire of their SUVs.
“The next growth opportunity is with aging baby boomers,” said Jim Hall, a Detroit-based analyst for AutoPacific Group in Santa Ana. “When they want a six-passenger vehicle, they might buy a minivan rather than a Grand Marquis.”
Despite past predictions of the minivan’s demise, sales have remained remarkably stable at about 1.2 million annually during the last five years. Nearly one of every 12 vehicles sold during that period was a minivan. Most analysts expect sales to remain in the 1-million to 1.3-million range through 2002.
“Its strength is that people seem dedicated to getting a minivan as soon as their second kid arrives,” Hall said.
But problems are looming. Minivan sales have weakened this year. Despite overall strong vehicle sales, minivan purchases through November are down 1.8% from a year ago. At the same time, SUV sales are up 14.8% and pickups are up 7.4%.
Worse for Detroit, minivan sales are falling off just as competition is increasing. Japanese makers Honda Motor Co. and Toyota Motor Corp. have replaced weak minivans with stronger models made in their North American plants this year, and other import brands are expected to enter the market in the next few years.
“Detroit must have sweaty palms right now,” said W. James Bragg, owner of Fighting Chance, a car-buying advisory service in Long Beach.
The newly competitive Japanese models are likely to dampen sales and profits for DaimlerChrysler Corp., General Motors Corp. and Ford Motor Co., which together now account for 88% of minivan sales. Already, the U.S. auto makers are trying to spur sales by offering hefty rebates of $1,000 or more on 1999 models.
Unruffled Detroit auto executives say minivan sales will pick up next year with the recent introduction of 1999 models--the Honda Odyssey, Toyota Sienna, Ford Windstar, Mercury Villager and Nissan Motor Co.’s Quest.
The powerful, well-equipped Odyssey has generated the biggest buzz. Aimed at offering Accord owners a larger, move-up vehicle, the Odyssey is seen as rivaling Chrysler’s minivans as the best full-size model in the market.
Chrysler is unshaken. “Every time a new competitor comes into the market, it recharges overall sales,” said Chrysler spokesman Brian Zvibleman.
There is no question that the minivan has a lot going for it. Minivans are arguably the most practical, versatile vehicles on the road, with tremendous people- and cargo-carrying capability. They offer car-like ride and handling and are easier to get into and out of than SUVs (and some passenger cars) while generally being more affordable and offering better fuel economy.
The shortcoming is minivans do not evoke an emotional response. Like the station wagons of the 1960s and ‘70s, minivans are often viewed as dull, lifeless vehicles that shout “middle-class, suburban family.”
“Image is more important than it used to be,” said Nextrend analyst Brown. “Minivans now have a negative image.”
J.C. Collins, brand manager for Ford’s multipurpose vehicles, acknowledges that minivans are derided by many as mere “mom-mobiles.” Despite this baggage, they remain popular and are attracting a growing number of consumers who no longer have school-age children.
He notes that about 30% of Windstar buyers are empty nesters and about 7% of new minivan purchasers are previous SUV owners. Chrysler says 40% of its minivan buyers do not have young children.
“What happens is that once you own a minivan, you get past the image,” said Ralph Sarotte, Chrysler’s general manager for minivans.
Indeed, minivan buyers are a loyal bunch. Chrysler, which controls 43% of the U.S. market and sells 500,000 minivans a year, says two-thirds of first-time minivan owners later trade in for another one.
Mike Crosby, a Long Beach father of two, bought a Plymouth Voyager in 1989. In 1996 he and his wife traded up for a Chrysler Town & Country, a luxury model that costs upward of $30,000.
“We are drawn by the minivan’s capability,” Crosby said. “It can carry lots of stuff and kids comfortably.” The former sports-car owner acknowledges that image is a concern and says that once his kids are grown, he is unlikely to stay with a minivan.
But Chrysler says that it expects more consumers, regardless of their stage of life, to be drawn to minivans for their basic functionality and, increasingly, their luxury touches. The auto maker says luxury minivan sales have doubled since 1995, and growing ranks of “extended nesters,” whose own children may be grown, still need a large vehicle to look after grandchildren or older parents.
Elaine Worsham, a 77-year-old grandmother in Seal Beach, bought a Chevrolet Lumina minivan in 1994 largely to help transport her grandkids. Two years ago, she spent $30,000 for a new Dodge Grand Caravan. She says it is easier to get into and out of than any other car or truck she has driven.
“It’s very versatile,” Worsham said. “I think every family should have one.”
The minivan segment’s prospects for growth are largely tied to new features, performance enhancements and styling diversity that will appeal to a broader range of consumers, analysts say.
Sales have held up in recent years in part as a result of Chrysler’s 1996 introduction of the four-door minivan, which added a second sliding door on the passenger side. So popular did the fourth door become that it is now offered as standard equipment on virtually all new minivans.
Two new features this year are likely to be hits with consumers. The Ford Windstar offers an optional sensing system that alerts the driver to objects behind the vehicle when backing up. And Honda has introduced a unique design with Odyssey’s third row of seats, which can be folded flat into the floor well to make room for cargo.
Honda, which does not expect the minivan segment to grow, forecasts sales of 60,000 to 100,000 Odysseys a year. The company’s push could hurt GM and Ford the most, analysts say, since “import intenders” are less likely to look at their minivans than those of industry leader Chrysler.
Regardless, competition will increase in coming years. Hyundai and Kia of South Korea will enter the U.S. minivan market in 2000; Japanese makers Mazda and Subaru will have new offerings. Among German makers, Mercedes-Benz is considering an upscale minivan, though executives with parent DaimlerChrysler say it won’t directly compete with Chrysler’s offerings, and Volkswagen may bring back its Microbus, much as it did recently with the New Beetle.
This is likely to create a prolonged buyers’ market, with manufacturers attempting to keep prices down and boost sales with incentives. Chrysler has responded to competition this year with $1,000 rebates.
“We are going to protect the corporate jewels,” said Sarotte, the company’s minivan chief.
In the next few years, auto makers are likely to experiment with new minivan designs, attempting to change the vehicles’ conservative image. GM, for in stance, is offering the Pontiac Montana, a sporty version of its Transport minivan with SUV design cues.
All the auto makers are exploring hybrid vehicles that combine car-like ride and handling attributes with truck-like performance and image characteristics. Some of these hybrids will be transformed minivans.
“We will see the evolution of the minivan as we know it,” said Nextrend’s Brown. “They will be crossover vehicles.”
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Minivan Plateau
Minivan sales have stagnated at about 1.2 million. The segment is expected to remain flat or grow slightly in the next five years.
Sales, in millions of units
1984: 257,333
1998: 1.2 million
*Estimated based on sales of 1,111,498 through November.
Source: Autodata
*
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BEHIND THE WHEEL: Reviews of two notable new minivans-- the Honda Odyssey and the Volkswagen EuroVan-- by Times automobile writer Paul Dean are available on the Highway 1 Web site.https://www.latimes.com./minivans.
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