Chrysler Knows How Its Bread Is Buttered

It is hard to know when to cut your losses and move on; and when to go for broke.

When it comes to minivans, Chrysler continues to be all in, even as its domestic competitors fold.

Ford now is out of the traditional minivan game and General Motors plans to exit next year. Both see the growing cross/utility vehicle market as a more lucrative alternative.

But Chrysler became the self-professed father of the modern minivan when the first one rolled off the line in November 1983. Its garageable van quickly became the crown jewel of the lineup, and this bread-and-butter vehicle still accounts for 17% of Chrysler’s U.S. light-vehicle sales.

Chrysler’s stranglehold on the segment has gone uninterrupted, holding at 38% share, while Ford has less than 6%; GM has 9%; and Honda and Toyota minivans have grown to 18% and 17%, respectively.

Historically, Chrysler has been willing to call every bluff to claim the kitty.

When both Chrysler and Ford researched a second sliding door a decade ago, they generated similar data from prospective customers. Ford abandoned the idea. Chrysler judged the consumer reaction as worth the risk, introduced the fourth door in 1996 and once again leapfrogged the competition.

Chrysler lost some of its edge when Honda introduced a fold-in-the-floor third-row seat, but a determined Chrysler raised the ante with Stow ‘n Go that tucks away the second- and third-row seats, an innovation that remains exclusive.

At this month’s highly anticipated unveil of the ’08 minivan in Detroit, Chrysler goes further with seats that swivel around a tabletop.

Kids of all ages likely will demand their parents buy the minivan that on long drives lets them play cards, eat dinner, complete homework, watch movies or read a book with direct and ambient lighting.

The new vans hit the market in the fall. Until then, the only two prototypes are locked to keep competitors with tape measures and sketch pads out.

It is Chrysler’s way of saying it has no intention of letting go of a segment that dipped below 1 million units in 2006 and accounts for less than 6% of total sales.

Rather, the auto maker sees minivan sales rebounding to 1.1 million units in 2007, and CEO Tom LaSorda says he is happy Ford and GM are bailing out. He forecasts Chrysler will sell 400,000 people movers this year and retain 35% market share, an increase from 370,000 sold in 2006.

LaSorda says there eventually will be a hybrid minivan, as well.

It is refreshing to see Chrysler fighting to retain leadership in the midst of Detroit’s largest restructuring in history.

The realities of downsizing and the need to be prudent are forcing the U.S. Big Three to make tough decisions in many light-truck segments. In addition to minivans, the degree of future participation in small pickups and midsize SUVs is under study.

Even as Chrysler faces hard choices in the months ahead, it is fully cognizant of how its bread is buttered.

[email protected]