Is Ford Backing Away From Minivan Segment?

Although Ford Motor Co. officials remain tight-lipped as to whether the auto maker is bowing out of the traditional minivan segment, obvious signs suggest the company’s direction.

Production of the Mercury Monterey minivan ceased last week at the auto maker’s Oakville, Ont., Canada, assembly plant, and the Ford Freestar twin could cease production next spring.

Through August, sales of the Freestar stood at 42,253, 29.7% off year-ago’s pace. For the month, Ford sold 2,370 Freestars, down a whopping 69.5% vs. like-2005, according to Ward’s data.

Ford introduced the two minivans in 2003 and projected combined sales of 200,000 vehicles annually.

However, the steady drop in demand for the two has fueled ongoing speculation they will be discontinued in favor of the boxy Ford Fairlane concept that bowed at the 2005 North American International Auto Show in Detroit.

The Fairlane, a cross between an SUV and minivan, features conventional hinged rear doors and not the sliding doors found on the Freestar and now-defunct Monterey.

Overall sales of minivans have slipped this year for the majority of North American auto makers, down 14.5% through August, Ward’s data shows.

Fairlane concept could replace Ford’s traditional minivan lineup.

If the industry decline continues on its present course, the segment will end the year at 947,000 units, compared with 1.106 million in 2005.

Ford has yet to reveal whether the Fairlane has been given the green light to replace the Freestar. However, the sorry state of the minivan market is not something the auto maker is ignoring.

“The minivan market is toast,” George Pipas, Ford global sales analyst, says, adding he, too, thinks the segment will drop below 1 million units this year.

Pipas blames the decline on aging Baby Boomers, which as empty nesters, no longer have need for such people movers. “When they were in their 30s and forming families and buying homes, that demographic came head-to-head with the minivan, and the rest was history.”

“Then Boomers’ kids got to adolescence, and they had something to say about the kind of car and everything else their parents buy,” adds Pipas, noting his own children drove him to sell his minivan and purchase an Explorer because minivans are considered “uncool.”

Some within Ford say a Fairlane-like vehicle would be a hit for the beleaguered auto maker.

“That’s another vehicle I would like to see, because (it) could be an enormous segment buster,” Pat Schiavone, newly named design director-trucks for Ford Motor Co. North America, told Ward’s during an interview earlier this year.

“I don’t think (the Fairlane) is a minivan. I don’t think it’s an SUV. I don’t think it’s a station wagon. It’s something all together different and very sophisticated looking…I would drive it.”

While Pipas declines to comment on the possibility of producing a Fairlane, he does admit the decline of the minivan segment is directly related to the rise in popularity of cross/utility vehicles.

“The Boomers, there are 75 million of them, (have moved onto) CUVs because they won’t be buying minivans or using stepladders to get up into SUVS,” Pipas says. “The CUV is perfect because it’s got utility but (with) more comfortable ride and handling.”

Despite the downturn in the minivan segment, plenty of auto makers continue to invest in it, such as Chrysler Group, Toyota Motor Corp., Honda Motor Co. Ltd., Hyundai Motor Co. Ltd. and Kia Motor Corp.

Volkswagen AG minivan venture with Chrysler and a Subaru-badged minivan are on the horizon as well

Pipas admits the market is substantial, but estimates about 30% of minivans sold this year were for fleet use.

“Go to New York where they have a cab line at LaGuardia (airport), and it’s all Toyota Siennas painted yellow,” he says. “Next to (the Ford) Crown Vic, the Toyota Sienna is No.2 for cabs.”

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