Minivans are innovating to survive

Rebecca Cook / Reuters

The Chrysler 700 C concept van is displayed at the 2012 Detroit auto show.

By Paul A. Eisenstein, msnbc.com contributor

Can the Chrysler 700 rekindle America?s love affair with the minivan??

The swoopy concept vehicle now on display at the 2012 Detroit Auto Show is a visually striking contrast to the staidly functional ?one-box? people-movers that most Americans are familiar with.

Generally given credit with inventing the modern minivan, Chrysler is hoping that the auto show car will give it a new direction that could revive the once vital market segment.

At their peak, models like the Chrysler Town & Country, Honda Odyssey and Ford Windstar accounted for about 8 percent of the U.S. new vehicle market. Without some breakthrough, that could soon slip to as little as 3 percent, according to a forecast by IHS Automotive.

?I don?t like the smell of the minivan market today,? said Chrysler?s CEO Sergio Marchionne, noting that he may kill off one of the carmaker?s remaining two models if a viable alternative, perhaps something like the 700, can?t be found to generate some enthusiasm in research clinics later this year.

At its peak, Chrysler had three different minivan models offered under its various brand names. General Motors and Ford also had an assortment of minivans, all now abandoned. And the market wasn?t any kinder to offerings from foreign marques like Hyundai, Kia and Volkswagen.

Only Toyota, with the Sienna, and Honda, with the Odyssey, are viable competitors to Chrysler today. But the minivan segment has shrunk so badly that none of the major automakers can really be described as seeing successful sales.

At the segment?s peak, in 2000, the car industry sold 1.37 million minivans, according to IHS Research Director Rebecca Lindland. That amount plunged to 415,000 in 2009, the industry?s overall worst year in decades. Minivan sales rebounded last year to 472,000, but demand is growing slower than for the industry as whole, which is why Lindland doesn?t expect the segment to capture more than 3 percent of the overall U.S. market going forward.

?It?s not a decline to nowhere, because as long as there are families there will be minivans,? Lindland said. But, she added, many families are looking for alternatives to minivans, trading functionality for style.

Stan Honda / AFP - Getty Images

Upscale sedans, electric vehicles and old-school muscle cars make their debuts at the 2012 North American International Auto show.

Some former minivan buyers have migrated to big SUVs, like Chevrolet?s Suburban and Tahoe models, but the big shift has been to crossover/utility vehicles, such as the Honda Pilot, which the automaker admits it specifically designed to attract traditional minivan customers.

How will automakers win back the lost customers?

?We need to redesign the van,? notes Chrysler?s CEO Marchionne, ?and peel away the skin of the onion? to find what still works for the minivan customer and what is sending buyers scurrying to other product segments.

That?s not as easy as it seems because while conventional wisdom suggests the vehicles are primarily sold to families with young children, minivans have also had a strong appeal, over the years, to empty-nesters who want more space and flexibility than they could get in a sedan.

Ironically, some of the features that attract one minivan buyer -- kid-friendly sliding doors, for example -- could turn off other customers.

Ford discovered this issue when it abandoned its most recent minivan offering, the Freestar, and switched to an alternative concept it dubbed the ?people-mover.? To make sure the wagon-like Ford Flex wasn?t confused with a minivan, the carmaker switched to using conventional rear doors, notes marketing chief Jim Farley. But that has actually limited the vehicle?s appeal to some buyers, especially those with young children.

Ford isn?t giving up. It has an updated version of the Flex coming to market and it is launching a downsized people-mover called the C-Max later this year, and it will be using sliding rear doors again. Ford hopes to enhance the appeal of the new model by offering it with a choice of either a conventional gas-electric drivetrain or the company?s first plug-in hybrid.

?When you talk to moms and dads they don?t necessarily want something sexy. They just want something practical,? Lindland said, noting that empty-nesters want something a little more stylish. The challenge, she concluded, ?will be finding a way to market to both of them.?

Can the 700 bridge the age gap? Chrysler certainly hopes so. And it will be watching closely to see what the public?s reaction to the prototype is during the Detroit auto show and automotive events to follow.

Meanwhile, Chrysler?s designers are tinkering with other designs at the carmaker?s engineering center in the Detroit suburb of Auburn Hills. Marchionne wants several possible designs that the automaker can ?take to [consumer] clinics by the end of this year,? he said.

There was a time when Chrysler controlled about two-thirds of the once-huge minivan market. Today it holds barely half of a much-humbled segment. Unless it?s confident it has a winner in hand it may stage an orderly retreat and settle for being a small participant in a shrinking niche.

Related stories:

Automakers driven by good design

Americans holding on to their cars for longer?

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Source: http://bottomline.msnbc.msn.com/_news/2012/01/17/10175683-minivans-are-innovating-to-survive

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