Thursday, May 24, 2018
Business

Chrysler still minivan champ, but must adjust to changing market

SOUTHFIELD, Mich. — Almost 30 years after the minivan was introduced, after attacks from all sides, Chrysler Group 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, 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," said Chuck Eddy, a Chrysler dealer in Austintown, Ohio. "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. To some extent, Chrysler created the minivan and the minivan saved the company.

Three decades later, Chrysler maintains its sales lead in minivans. It's one of the longest runs atop a vehicle segment in the United States, along with the 35-year pickup reign of Ford's F-Series line.

Chrysler has kept the title despite entries from Ford, Toyota, Honda and the predecessor of General Motors. Ford and GM eventually quit the segment, and Chrysler has claimed at least 40 percent of the U.S. minivan market 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 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.

With its minivans, the company is "studying all options," including eliminating one of its models and then broadening the target market for the other one, said Saad Chehab, president of the Chrysler brand. Right now, the company aims to sell the Dodge Grand Caravan for less than $30,000 and its Chrysler Town & Country, which has more equipment standard, for more than $30,000.

Marchionne would have to decide which will survive.

"If it is one, you have to look at if Dodge can go up to the upper-market world of minivans, and same thing, can Chrysler really go down to capture the markets that Dodge Caravan does?" Chehab said. "It's a difficult answer."

Toyota's Sienna goes for $33,032 and Honda's Odyssey for $32,949, according to Edmunds.com data. Grand Caravans sold for $27,151 on average.

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