The death of the minivan (and Chrysler?)

[doh]

http://finance.sympatico.msn.ca/inve...mentid=8397565

Chrysler exists because Lee Iacocca bet the company on the minivan. Now, thanks to the oil crisis, the minivan looks like it could be on its last legs.

One of the company's two minivan assembly plants will be shut indefinitely on Oct. 31, Chrysler said on Monday. The problem is that families -- the target market for minivans -- have been particularly affected by rising gas and food prices, falling home values and more difficulty in borrowing money.

It's a humiliating development for Chrysler, which spent $1.4 billion on the redesign of its two industry-leading minivans, the Chrysler Town & Country and Dodge Grand Caravan. And then saw sales go, well, nowhere.

"Everything that a family needs is more expensive right now, and so the last thing they're looking at is, 'Do they need to replace their Honda Odyssey?'" said Rebecca Lindland, an auto analyst for Global Insight, the economic consulting firm.

U.S. minivan sales peaked at 1.37 million in 2000, 17 years after Chrysler introduced them. They've been falling steadily since and are expected to fall below 650,000 this year for the first time since 1986. Sales of the Dodge Caravan were off 35% through May from a year ago and 13% for the Chrysler Town & Country, according to Autodata Corp., which tracks industry sales.

The minivan has been Chrysler's top product for years, and Chrysler has 30% of the minivan market. (The minivan came after Chrysler nearly collapsed in the 1970s and required a U.S. government debt guarantee to stay in business.)

But sales are off because SUVs have become far trendier. The much bigger problem: soaring gasoline prices that have made minivans even more vulnerable.

"The future of the segment is up in the air," Tom Libby, senior director of industry analysis for the Power Information Network, a division of J.D. Power and Associates, told The Associated Press recently.

But Chrysler created some of its own problems. Among the biggest issues: It discontinued its smaller-wheel model because it couldn't put in all the features that were in the redesigned models. That decision now haunts the company because buyers have been put off by the higher prices required to pay for the new minivans.

After stopping production at its minivan plant, in suburban St. Louis, Chrysler will still make minivans at a plant in Windsor, Ont. It is also cutting a shift at a truck assembly plant in Fenton, Mo. In all, about 2,400 of 3,500 workers at the Fenton facilities will be affected.

Chrysler's announcement comes at the end of a dismal quarter for the industry. Sales reports that the automakers will release Tuesday are expected to show that June was the worst month in at least 15 years, with sales down about 17% from a year ago, according to estimates by Edmunds.com.

Chrysler, which makes a higher proportion of trucks than the other major automakers, is believed to have fared the worst, but all three Detroit automakers are projected to report drops of at least 25%.

The combined monthly U.S. market share for Chrysler, Ford Motor (F.N) and General Motors (GM.N) domestic brands is estimated to be 45.4% in June, down from 51.4% in June 2007 but up slightly from the historic low of 45.3% in May, Edmunds says.

There is growing speculation Chrysler might seek to break itself up or file for bankruptcy. The company denies both possibilities. Shares of GM and Ford are down 53.4% and 28% this year, respectively.

[footney]

Chrysler will declare bankruptcy in 2009. The Jeep Wrangler and Liberty are the only Chrysler-built I would buy.

[doh]

It does look grim for Chrysler, but the article looks back at so many hits that they have had.

The "Mini Van" (which Ford dismissed)

The "K car"

Buying "JEEP"

and bringing back the "Hemi" nameplate.


My question is, "How were the BIG 3 so outa touch?"

[doh]

Originally Posted by doh

and bringing back the "Hemi" nameplate.


My question is, "How were the BIG 3 so outa touch?"

Sorry let me irradiate, with the "All New Camaro/chrrallenger", coming out. (Late again.)


Let me say, "Too Little, Too Late"


When did the "Big Three" become so outa date?

[PhishPhood]

Originally Posted by doh

It does look grim for Chrysler, but the article looks back at so many hits that they have had.

The "Mini Van" (which Ford dismissed)

The "K car"

Buying "JEEP"

and bringing back the "Hemi" nameplate.


My question is, "How were the BIG 3 so outa touch?"

Actually I don't think that they were out of touch. Obviously they filled a huge demand for gas guzzling monsters that made mountains of moolah all through the 90s. This was spot on in terms of meeting what the market wanted.

What they didn't do was keep in balance. This is the most basic concept in a dynamic situation. Whether it'x boxing or hitting a pitched ball or karate or staying healthy a good sense of balance keep one from going too far thus falling over or failing to be able to perform or dying from a bad diet.

The gobs of gelt from the SUVs and trucks and minivans was too much to turn down so each of the Big 3 got out of balance. They were not able to react quickly enough to a punch thrown from a different angle.

They all are guilty of this. However in fairness the key reason that they lost touch with the small car market was that the legacy costs on every vehicle ate up any potential profit on these babies. All through the 80s and 90s and this decade they had $2000 - $3000 in extra costs on every vehicle. Only the SUVs and trucks could support this healthcare tax and still make a profit.

Now the legacy costs are gone so all should be well.....if they had more time. But unfortunate events ( a punch from another direction ) took them by surprise before they could get out of the shadow of the legacy costs and start to make a bunch of good smaller vehicles.

[FenwickHockey65]

It's been common knowledge that the minivan market is slowly dying in America. Crossovers are the next big thing.
Incidentally, the Dodge Journey isn't all that bad. I looked at one at an event at a park here in West Chester.

[Ming]

Death of the minivan in its current form? Yes. Just like the truck-framed Astro/Safari type of "minivans" died out, I expect the long, heavy land yacht type of minivans to be replaced by vehicles such as the Mazda5 and KIA Rondo --- that is, if those types of mini-minivans are offered and advertised by the bigger manufacturers so that Americans know they have the choice to go one size smaller and keep their sliding doors. Or at least we'll see a stronger split between Mid-i-vans and Mini-vans that actually are Mini.

The minivans of today like the Honda Odyssey are way more than a mom with a single kid really need ("We had a baby, now we need a minivan with dual sliding automatic doors and 4 LCD screen headrests!") and gas prices and a weak economy should wake them up to that -- if they don't just downsize straight into a sedan where they probably should have stayed in the first place.

[pwoods]

My word, I think this is one *death* that is over rated. A recent trip to a State Park here in Washington, I kid not, 13 vehicles in one parking lot, all minivans, at least 12 of the 13 were Honda's. I have three friends that also have Odyssey's, and I asked one out of curiosity what kind of mileage he got. His response was that he wasn't sure, but he thought around 30mpg.

For the minivan to die, people are going to have to start believing that their toyotas and hondas are actually getting poor mileage.

Another note: I happen to know someone very seriously considering trading their Sienna in on a Sierra hybrid.

[goblue]

I say good riddance. So many of the people driving these things were either fire breathing soccer moms shuttling their kids to so many activities they are going to get to college and turn into potheads, or families with 1 or 2 kids who didn't need it in the first place, but were mesmerized by the power doors and hatch. They've become overweight, bloated vehicles that should be grouped with SUVs, even though some portray them as a "responsible" choice.

Maybe Americans won't be so wasteful and fill their McMansions full of crap if they don't have their minivans to haul all the junk. Deeper into debt to buy a bigger house to hold more crap and then a vehicle to move all said crap to a bigger house. Brillaint.

[Rocket 88]

I can't see how Chrysler can survive without a merger. Maybe Jim Press is really just a scouting party for Toyota to buy the whole company. (I'm just starting rumors, I don't believe that). But this is pretty bleak.

[kodos78]

We love our 2008 Town and Country. It has been an incredibly versatile vehicle, and it is one of the few vehicles that is comfortable for our growing family. We often take four adults and two children. And we are planning on having at least one more kid. A Lambda won't work for us, sorry. I can now take the entire family to Home Depot and load up the back of the car. Something I couldn't do with any of our previous vehicles.

That said, a smaller minivan would be a good alternative for most of us. Our HHR SS is great for going around the town, but we miss the sliding doors, which allow our kids to jump into the car easily.

I feel bad for Chrysler. They were completely mismanaged by the Germans, and they lost the momentum they had when they were unveiling hit after hit like the Town & Country, Intrepid, Neon, 300M, Dodge Ram, Viper, Sebring, PT Cruiser, Prowler, Jeep Grand Cherokee, etc...

All they needed was a healthy dose of quality control, and they could have made it big. A shame really.

[GM-Joe]

Originally Posted by kodos78

We love our 2008 Town and Country. It has been an incredibly versatile vehicle, and it is one of the few vehicles that is comfortable for our growing family. We often take four adults and two children. And we are planning on having at least one more kid. A Lambda won't work for us, sorry. I can now take the entire family to Home Depot and load up the back of the car. Something I couldn't do with any of our previous vehicles.

That said, a smaller minivan would be a good alternative for most of us. Our HHR SS is great for going around the town, but we miss the sliding doors, which allow our kids to jump into the car easily.

I feel bad for Chrysler. They were completely mismanaged by the Germans, and they lost the momentum they had when they were unveiling hit after hit like the Town & Country, Intrepid, Neon, 300M, Dodge Ram, Viper, Sebring, PT Cruiser, Prowler, Jeep Grand Cherokee, etc...

All they needed was a healthy dose of quality control, and they could have made it big. A shame really.

Correct. How stupid they are to let the Neon and PT Cruiser die and replace them with a cheap looking hatchback and a couple of mid-sized sedans from the same stretched platform that look like they were from a third-world country.

[BerettaZ]

Originally Posted by pwoods

My word, I think this is one *death* that is over rated. A recent trip to a State Park here in Washington, I kid not, 13 vehicles in one parking lot, all minivans, at least 12 of the 13 were Honda's. I have three friends that also have Odyssey's, and I asked one out of curiosity what kind of mileage he got. His response was that he wasn't sure, but he thought around 30mpg.

For the minivan to die, people are going to have to start believing that their toyotas and hondas are actually getting poor mileage.

Your friend is has been drinking too much of that Honda Kool-Aid.. My Ody, 70% highway driving, gets 20 MPG...

[BigThreeForever]

Back in 2000 or 2001, I read a (good) book - whose name and author escape me - which described how Daimler-Benz managed to take over Chrysler in the so-called "merger of equals".

I am still massively puzzled as to how the dynamic, feisty Chrysler that emerged in the early 1990s could meekly accept such a thing.

This was the Chrysler which could suddenly do no wrong, which pumped out one brilliantly styled smash hit after another, which made plenty of money, and which was so full of inventiveness, originality and vigor. If any company represented the famed American "can-do" spirit between 1992 and 1998, it was the Chrysler Corporation. These were the Chryslers of Robert Lutz, Francis Castaing and Thomas Gale - a winning team if ever there was.

Yet, in 1998, it sold itself to Daimler-Benz. I can vividly recall my disbelief when the news broke, seeing the Pentastar and the Three-Pointed Star together on the news. My immediate feeling was this "ain't gonna work . . . . two more different corporate cultures it would be difficult to imagine!"

And so it was. After that, all was downhill, with Chrysler's spirit simply flickering out like a guttering candle. Mediocrity replaced innovation. Ugliness replaced style. The Chrysler of the early and mid 1990s was dead.

With the benefit of 20/20 hindsight, and despite all the anti-Daimler sentiment here, I hereby contend that the two persons persons responsible for the imminent collapse of Chrysler are former chairmen Lee Iacocca and Robert Eaton.

Robert Eaton, the last chairman of the publicly quoted Chrysler Corporation, is accused for not having the cojones to say no when the men from Stuttgart came knocking. Words fail me as to this man's spinelessness and lack of leadership.

Outgoing chairman Lee Iacocca instigated the infamous "ABL" (Anybody But Lutz) programme when searching for his own successor. Having denied Lutz the top job, Iacocca brought in GM's Robert Eaton.

THAT, ladies and gentlemen, was the moment that Chrysler was doomed, though we could not possibly have known it then.

Lutz would never have capitulated in 1998 like Eaton did.

[kenman923]

I can see it like this. Goodbye minivan, hello crossover. Like the minivans were en vogue in the 80s and 90s, the crossovers will be the new family haulers of the 21st century.