Minivans Stable

The shine gradually is fading for the front-wheel-drive minivan as sales decline and marketers decide the “soccer mom” image doesn't cut it on the sales floor anymore.

Minivan sales peaked in 1999 and 2000, when they reached 7.7% of the North American light-vehicle market, and since have fallen steadily to a 9-year low of 6.6% in 2003, according to Ward's data. The numbers suggest cross/utility vehicles have sapped the most sales away from minivans, as well as from other segments. Since 2000, CUV share has climbed from 3% to 9.7%.

But no one is predicting the minivan's demise or saying it has no place in the market. Its utility can't be denied. A family with at least one child in a car seat or older kids with friends is hard pressed to live without a minivan.

And the auto makers, themselves, certainly are not abandoning them. In fact, the minivan segment could be one of most interesting battlefields to watch over the next two or three years.

Indeed, by the '06 model year there will be 14 distinct minivan models on sale in the U.S., compared with 11 for the '03 model year.

And product will be improving, starting with Chrysler Group's early '05 upgrade that adds fold-down second- and third-row seats to the Dodge Caravan and Chrysler Town & Country.

Honda Motor Co. Ltd. adds capacity for its Odyssey at its Lincoln, AL, assembly plant this year, and General Motors Corp. does a major restyle to its stable.

Also, Ford Motor Co. will have its first full year of availability for the new Ford Freestar and Mercury Monterey, as will Nissan Motor Co. Ltd. with its all-new Quest.

Additionally, there are redesigns coming from the rest by 2006. Moreover, there actually will be an increase in overall production capacity for minivans in 2004 and again in 2005.

In 2003, including an estimate for overseas output aimed at North America, there was straight-time capacity for 1.496 million minivans. Sales of only 1.267 million, or 84.7% of capacity, represent a drastic drop from the 98% capacity attained in 2000 when North American light-vehicle sales hit an all-time high of 19.76 million, according to Ward's data.

Therefore, if minivan sales don't turn around, there could be a shakeout.

Chrysler seems to be the most vulnerable. It has nearly a third of the industry's minivan capacity at two plants; GM, Ford, Toyota Motor Corp. and Nissan only have one plant or assembly line dedicated to building minivans.

Where's the offset if sales go up? CUV sales, overall, are certain to keep growing. There may be defections from CUVs if some owners decide they need more space, or from SUVs if they're looking for better fuel economy. But most sales likely would come from cars.

However, the probable result is that as long as the economy remains stable, fiercer competition in the minivan segment will combine with greater competition in other segments to cause total industry volume to grow. Thus, volume for minivans could rise even if share slides.