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Crossovers Brushing Minivans Aside

Crossover Vehicle Popularity on Rise

POSTED: 6:58 am PDT May 23, 2008
UPDATED: 6:22 pm PDT June 20, 2008

If you think you're seeing fewer and fewer minivans on the road than 20 years ago, you're not wrong.

SUV Owners Looking For Alternatives

Two of the Big Three American automakers -- General Motors and Ford -- have already announced they are no longer going to produce minivans, leaving Chrysler, Dodge, Toyota and Honda as the last of the big automakers building the family-oriented people movers. But that doesn't mean the minivan is going the way of the dinosaur.

"I don't think it's the end of the road because we will still see significant numbers sold," said Jack Nerad, the executive market analyst for Kelley Blue Book. "But the heyday of the minivan as the primary family hauler are gone."

Part of the decline comes from the choices people have when car shopping.

"When you look at the market 20 years ago, look at all the choices we have now," said Jessica Caldwell the manager of pricing and industry analysis at Edmunds.com. "You have car based-SUVs, large SUVs, luxury cars. Midsize sedans are so much bigger. For those who need the space, just too many choices out there."

Chrysler officials tried to dispel the myth the minivan was a weak link for the company.

Stuart Schorr, Chrysler's senior manager for sales, Mopar and dealer communications, said in a post on Chrysler's blog that the automaker's retail minivan sales are flat through the first quarter this year, despite an overall 9 percent drop in industry sales.

"The minivan segment is not a niche segment," Steven Landry, Chrysler's executive vice president for North American sales, told Bloomberg in an interview. "It is a very profitable and volume-oriented segment for Chrysler."

Caldwell said that Chrysler can't expect the minivan to perform as in the past.

"They invented the concept and it was their bread and butter," she said. "In the near term, I think can survive."

Caldwell said with the Honda Odyssey, Dodge Grand Caravan and Chrysler Town & Country, high incentives have been offered to consumers in an effort to move them off dealer's lots.

"The market was given a mild boost but it can't be sustained forever," Caldwell said. "Interest is dwindling. With the [2008 models of the] Grand Caravan and Town & Country being new, there should have been some excitement but it wasn't there."

Perception Poses Problems

For the last several years, families have been moving toward SUVs because of the stigma driving a minivan gives.

"People think that it's boring and boring-looking, but the most peculiar aspect is that people think it makes them look like parents," said Joe Wiesenfelder, senior editor of Cars.com. "Even if they are, they want to maintain the image that they are still young, active and have their own personality. That's what was behind the SUV craze."

Nerad said the stigma may come from the experience todays parents of young children had when their parents had some of the early iterations of minivans.

"It's remembered as not a cool or interesting or new kind of thing, because it's not," Nerad said. "There's an aura that surrounds minivans that its conventional. It's the opposite of sporty: utilitarian, kind of dull, very family oriented to the extreme. Some people gravitate toward that. I think they are very useful vehicles, but the styling and the aura can be negative to some people."

Gas prices have also worked against the minivan market. The Mazda5, a smaller minivan than the other main players in the market, gets the best gas mileage of 2008 models and is the only minivan that gets more than 20 miles per gallon in city driving.

"Gas is making all large and inefficient vehicles hard to sell," Wiesenfelder said. "I would not expect the minivan sales to be dropping more than sales of other large and relatively inefficient vehicles. I think the appeal of minivans has been slowing for a long time, and gas prices are accelerating that, but it's not dying.

What's Coming Next?

The next big platform in the car market is the crossover, what Nerad calls a minivan in disguise.

"Crossovers are half SUV, half minivan, but really are car-based and have a lot of car-like attributes," Nerad said . "They are lighter, slightly better on fuel but accommodate seven or eight people."

While Nerad said he thought it was strange that GM and Ford would essentially cede the minivan market to their competitors, he said they have gotten a jump in the crossover market.

"Going the crossover route is a way to get to the same customer and price-point with a slightly different vehicle," Nerad said. "They have been successful at that. The erosion in minivan segment largely to crossover."

Wiesenfelder said that the crossover is likely the people mover of the future.

"It's not a great time to go out to buy a new car with high gas prices and a soft economy," he said. "Car-based vehicles [compared to larger SUVs] are proving to be the wave of the future."


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