Join Date: Feb 2001
Location: The Hills of North Georgia,USA
U.S.A.:Automakers lavish attention on van market
By James R. Healey, USA TODAY
Automakers are attacking the small and stagnant minivan market with vigor normally reserved for the booming sport-utility market.
They are lavishing their newest van designs with costly luxury hardware and expensive sports car running gear. They have teamed with upscale partners for audio and video systems.
They've even built factories just to manufacture minivans.
All that for a market of about 1 million sales a year, split largely among five major players that snag 70% of all minivan sales. The other 10 minivans are left to scrap for the leavings some 300,000 annual sales. That's enough to keep one factory running full time but not enough to profitably occupy 10.
Seldom in the car business is so much spent by so many to lure so few into showrooms. It seems like madness on the part of automakers, but it could be magic for buyers: The more competition, the bigger the discounts.
Since the redesigned 2004 Toyota Sienna minivan became widely available in May, for example, discounts on popular domestic-brand minivans have gone up about $400, according to Edmunds.com car-pricing service.
"It's fair to say it's a mature market and at best it's holding steady, but you have to look at more than who buys minivans," says Ford spokesman David Reuter. "You have to look at what other type of vehicles they move into.
"Minivans are life-stage vehicles. You certainly need to be there when they need minivans," Reuter says, or you risk losing the chance to sell them other vehicles later.
Perhaps more important to automakers is a minivan resurgence as aging baby boomers look for roomy, practical vehicles that don't have the high step-in height that sport-utility vehicles do.
Possible harbingers of that: 37% of minivan buyers are older than 50, presumably without kids at home, Ford says. Toyota says 25% of minivan owners list their occupation as "retired."
The auto industry assumption is that such van buyers want high-end minivans, not cheaper, kid-proof vehicles that families like.
Ford's new minivans come to market this fall: Ford Freestar, replacing the Windstar, and Mercury Monterey, near-clone of the Ford replacing the Mercury Villager.
"We see the premium minivan segment as underserved and an opportunity for Mercury," says Ford's Jim Cain. The Monterey will have more standard features than the Freestar does and will be priced higher.
Toyota is betting hard enough on the appeal of high-end vans that it was willing to adapt the pricey Lexus RX 330 chassis with its all-wheel drive for some versions of the 2004 Sienna. A loaded, all-wheel-drive Sienna Limited is close to $40,000. The Limited and the XLE just below it should account for 30% of Sienna sales, Toyota says, mainly to empty nesters and retirees.
Selling price of the new Sienna averages about $29,500, Edmunds.com reports. That's nearly $5,400 more than Dodge Caravan, the best-selling van.
Honda discovered the lure of luxury when it started getting thumped by dealers and customers for not offering leather upholstery in the Odyssey minivan. "That was a weakness. We had to add that," says spokesman Chris Naughton.
Hoping to pre-empt the increasing competition it foresaw, Honda took the Odyssey through the most extensive MMC minor model change in Honda history during what normally would have been routine updates for the '02 model year, Naughton says. That's when leather was added to the list.
Odyssey also got a significant powertrain upgrade. The 3.5-liter V-6 was boosted to 240 horsepower vs. 210 previously, and the automatic transmission became a five-speed instead of a four-speed. Rear-seat DVD system became available, and chassis improvements calmed and quieted the van to enhance its premium feel.
A full Odyssey redesign probably won't come until '05 or perhaps '06. Honda has time for changes if it spots something that buyers like on the new crop of vans.
Minivan pioneer Chrysler led the way into the high-end van market. When it redesigned its vans for the 1996 model year, it promoted the Town & Country Limited as "the luxury car alternative." It also introduced the driver's-side sliding door that year, putting other vans far behind.
But domestic-brand minivan innovation has slipped, resulting in declining market shares as import brands develop more sophisticated, clever minivans.
Honda introduced a fold-into-the-floor third-row seat in its '99 Odyssey. Toyota's Sienna and Nissan's redesigned '04 Quest have that feature. Detroit vans still don't.
The new Ford Motor vans will. Chrysler is trying to adapt a system to its current vans by spring.
"Honda, Toyota and Nissan are on a roll and see opportunity to take business away from the domestics, who are reacting and trying to hold their turf," says Dan Gorrell, vice president at con******t Strategic Vision.
(Left photo) Ford's 2004 Freestar has an improved engine and a folding third-row seat that also drops back for tailgate parties.
(Right photo)Mercury Monterey
My first car was a 67 Mustang Coupe, 2nd one was a 67 Cougar XR-7, 3rd one was a 66 Mustang Coupe. Why did I get rid of these cars for ? I know why, because I'm stupid, stupid, stupid.
My next Ford.....