Minivans Maneuver for Maximum Profits

FORT WORTH – It’s no secret in Detroit that Chrysler Corp. executives refer to their legendary lineup of minivans as the “family jewels.”

Since Chrysler launched its first minivan in 1984, the company, through good years and bad, has leaned on its unsinkable Caravan and Voyager to remain afloat in what is arguably the most competitive business in the world.

Windstar takes on the aerodynamic shape that the Taurus brought to the North American market in the mid-1980s. Its front-wheel-drive design eliminates the interior drivetrain tunnel and allows Ford to provide passenger packaging not seen in its Aerostar, a good but not stellar performer.

Windstar takes on the aerodynamic shape that the Taurus brought to the North American market in the mid-1980s. Its front-wheel-drive design eliminates the interior drivetrain tunnel and allows Ford to provide passenger packaging not seen in its Aerostar, a good but not stellar performer.

The company holds a 45 percent stake in the minivan market, selling more than 510,000 minivans in 1993, nearly double that of its nearest competitor.

Over the past decade, the automotive world has taken its shots at Chrysler. Ford, General Motors and a host of worldwide competitors have paraded out their own minivans, all proclaiming to finally have a vehicle to take a bite out of Chrysler’s pride.

It hasn’t happened.

But the competition is poised to try again. Starting in less than two weeks and extending over the next several years, Chrysler will face an onslaught of new minivan challengers – all aiming to claim the king’s crown and change consumer attitudes about the market leader.

The result, analysts say, will be higher quality and lower prices for buyers – the beneficiaries of an industry slugfest.

The attack begins March 24, when Ford unleashes Windstar, a minivan built on the chassis of Ford’s prized Taurus sedan. Big, brawny and flexible, the Windstar will, according to Ford anyway, set a new standard that Chrysler’s vans will be forced to step up to.

“I think it will stack up real well,” said Sam Pack, who owns Five-Star Ford in Hurst, about the Windstar. “They have a good product and strength in the marketplace, but I really think that this product(Windstar) is going to be a generation ahead of what’s in the marketplace today.

“I think the Windstar can be our Explorer in minivans.”

Chrysler also owned the four-door sport utility market until the entry of Ford’s Explorer in 1991.

Ford will be followed later this year by Honda, offering a 1995 model based on its popular Accord. Over the next two to three years, GM, Mercedes-Benz, Volvo and BMW, among others, are expected to enter the fray as well.

“I think they will hit Chrysler pretty hard,” said Dave Cole, director of the Office for the Study of Automotive Transportation at the University of Michigan.

“The Windstar is a serious entry, and GM will have a serious entry next year. It will be interesting to see how Chrysler competes in that segment.”

Windstar takes on the aerodynamic shape that the Taurus brought to the North American market in the mid-1980s. Its front-wheel-drive design eliminates the interior drivetrain tunnel and allows Ford to provide passenger packaging not seen in its Aerostar, a good but not stellar performer.

Windstar holds seven passengers, is longer and wider than most of its competitors, boasts a 3.8-liter V-6 engine, and is, Ford contends, the quietest minivan ever.

“From my perspective, customers really have not been given an alternative,” said Bill Lenn, Windstar’s marketing plans manager.

“Chrysler did a very good job with the Caravan. If you asked customers why they didn’t consider other vehicles, they said there was really no other choice.

“With Windstar, we are really going to give that customer another choice.”

For a base price of $19,455, Windstar buyers will get driver- and passenger-side airbags, reinforced bumpers, four-wheel anti-lock brakes, air conditioning, stereo, and 24-hour roadside assistance.

A better-equipped Windstar, with electric locks, electric windows and power seat controls, will be priced just over $21,000.

Even casual auto industry observers might think the Ford package is enough to strike fear in the heart of dealers like George Grubbs.

But Grubbs, who owns a Chrysler dealership in Bedford, says he’s heard it all before.

“This is the first time they have had a product that can come close to competing with the Chrysler minivans,” Grubbs said. “From what I have heard, it will be one of the better products they have put out.

“But my personal opinion is that we have heard this over and over and over from every manufacturer. Everyone has said in the pastthey’ve had a product to compete with Chrysler. But not a single one of them has ever made a dent.”

Grubbs knows minivans better than most dealers. He should, because he sells plenty of them through Chrysler, Nissan, Oldsmobile, Lincoln-Mercury and Mazda dealerships that he owns.

He believes most of the coming minivans are simply a means for the companies to provide products to loyal customers.

“Honda is a good example,” Grubbs said. “There are a lot of very loyal Accord buyers out there that have not been able to buy a Honda minivan. That’s frustrating if you really are loyal to one brand.”

But analysts caution against overconfidence.

Joel Pitcoff, a Ford spokesman who specializes in analyzing industry sales data, notes that Chrysler’s share of the market took a 3-point dip last year, which he credits to the release of the Mercury Villager and Nissan Quest.

The twin vans were designed by Nissan and produced by Ford at its plant in Ohio. Under their agreement, Ford is guaranteed two-thirds of the plant’s production, with Nissan gaining the rest.

With the entrance of Villager and solid sales from Aerostar, Ford saw its minivan market share grow from 18.6 percent in 1992 to 23.1 percent in 1993.

Although some of that share growth came at the expense of Japanese minivan-makers, Ford believes at least a portion came from Chrysler, which prices its vans from $15,500 for a base model Voyager to $29,280 for an all-wheel-drive Town & Country.

Built on a car’s chassis, the Villager/Quest offers a 3.0-liter, V-6 Nissan engine. Priced between $18,375 and $24,635, the Villager comes with a driver-side airbag and four-wheel anti-lock brakes as standard equipment. It contains no less than 10 cup holders and features a fold-down seatback that can be used as a table (with cupholders) on long trips.

“I think that Ford, because of the Nissan-engineered Quest, developed the Windstar based on some of those theories,” Grubbs said.

“The market now consists of two minivans. There is the standard van, built on a stretched wheelbase on a car chassis. Then there is the full-size van that is still built on a truck chassis.”

Although Windstar is based on the Taurus chassis, its wheelbase is lengthy. Ford said that it keyed on that effort in order to provide a vehicle with a superior ride.

The company also made sure its van is targeted toward women.

“Females will be involved in about 90 percent of the purchase decisions of a minivan,” said Lenn, the product’s marketing plans manager.

“They will be the primary driver in 50 to 60 percent of the cases. You’re not going to design a minivan that doesn’t take those factors into consideration.

“So you do things like having the lowest step in height in the front row and side door. Or you have low lift-over height in the third row to get your groceries or briefcases or golf clubs or whatever the case may be.

“You design the switches on the interior so they are ergonomically in front of you, so you don’t have to reach for anything and the controls are easy to get to.”

Jim Wangers, an analyst with Automotive Marketing Consultants in Warren, Mich., said the true test for Chrysler will come in how it deals with its newest rivals.

As in past years, Chrysler is running a sale on minivans, bolstered by a national advertising campaign.

“What they want to do is suck up every potential minivan buyer out there before that Ford product hits the market,” Wangers said.

Chrysler is also pushing ahead in product development. Next year it will bring out a new minivan, a vehicle expected to take in everything the competition has and then some.

Dick Winter, Chrysler’s general product manager for the minivan platform, said the company may lose some market share. But he doubts that it will lose sales volume.

He said Chrysler expects the minivan market to grow from 1.13 million units this year to as many as 1.4 million in 1996.

“I think the minivan market is continuing to grow,” Winter said. “We have looked at this for a number of years, and I have been answering the same question for a number of years. `Here come the GM APVs, are they going to eat into your share? Here comes the Villager. . . .’

“It’s interesting that every time a new competitor comes in or we do something significant, like add a V-6 engine or lengthen the wheelbase, the market just keeps growing.”

Winter said Chrysler is at production capacity for minivans and has no immediate plans for expansion.

He believes that the current crop of Chrysler vans matches Windstar on needed safety features, with their dual airbags and front-door and side-opening door beams. Chrysler minivans, although not required to by law, conform to all passenger car safety standards through 1998.

New competitors may offer plenty of electronic wizardry to draw customers in, Winter said, but Chrysler has learned that minivan buyers purchase vehicles based on function and versatility.

It is in those two areas where GM is expected to focus when its new minivan hits the market in 1996.

Cole believes that GM will do a better job than Ford in competing with Chrysler on price.

“I think the moves you have seen GM make over the past few years(closing plants, reducing costs) will make them far more price competitive with the new model,” Cole said.

The new GM van will have a steel skin, as opposed to its composite body today, and will replace the current lineup of GM vans that critics have called “dust buster” look-alikes because of their pointed nose.

GM sources say the new vans will come in short and long wheelbases and will offer powered sliding doors on both sides of the vehicle.

Kurt Ritter, marketing manager for Chevrolet trucks, said the new vehicle has been the focus of an intense GM development effort.

“It’s probably the most clinic-proven product we’ve had in a while,” Ritter said. “We want to make absolutely sure that it is designed by customers for customers.

“We have paid attention to every bit of the research. We have made changes relevant to the research.”

Ritter, who declined to discuss specifics about the van, said it will meet its competitors’ emphasis on safety characteristics.

“Safety was probably the most important issue to date,” he said. “It is something everyone is paying attention to. In the future it will serve less as a differentiator because everyone will have been on top of that issue.

“There is going to be a little more attention paid to style. Minivan drivers need some dignity in this world. They don’t need to drive around in boxes. We’ll have a little more style. But it has to be, to serve its purpose, a very functional vehicle.”

Author: MICHAEL D. TOWLE; Star-Telegram Writer

Copyright 1994 STAR-TELEGRAM INC.