Resurgent Large Van Segment Poses Questions for GM

Fresh product in a segment historically known for lack of upgrades has breathed new life into large vans.

European-styled and -engineered designs that are sleeker, more fuel-efficient and often better looking have reinvigorated fullsize-van sales at Ford and allowed FCA US – once a major player in the segment when it was Chrysler Corp. – to successfully return to the segment.

Furthermore, it has lifted relative newcomers Mercedes, which started the trend with the Sprinter, and Nissan into the forefront of the segment.

Still a dominant player, though lacking an updated product, is General Motors.

Through May, combined sales this year of the Chevrolet Express and GMC Savana have declined 36%, and GM’s share of the segment has dropped to 25% from 36%.

To be fair, some of the decline is because additional capacity at the Wentzville, MO, assembly plant where they are built is being devoted to the new Chevrolet Colorado and GMC Canyon small pickups, which have become huge successes since being brought back after a 2-year hiatus.

Inventory of GM’s fullsize vans is down even more from year-ago than their sales, suggesting some pent-up demand, and executives have said deliveries will rebound later in the year after production is bumped up at Wentzville – though the way Colorado and Canyon are going they might be hard-pressed to follow through with that plan.

However, it brings up the question of how long GM can compete in the segment without a serious upgrade, such as a total overhaul, to its products.

There are no known plans to freshen the automaker’s offerings to any significant extent. There has been speculation GM could enter into a product agreement similar to the pact it has with Nissan, which builds a version of its NV200 small van sold by GM as the Chevrolet City Express.

Based on WardsAuto’s light-vehicle segmentation, GM has more market coverage in the U.S., not to mention all of North America, than any other automaker. The Small Van sector was the only major segment it was not competing in when it began selling the City Express last year.

At some point, if it hasn’t already, the automaker will have to decide whether it wants to commit some significant capital to the segment. My bet is GM will stay in the segment one way or another. Even with the oldest product, GM’s vans still appear to have a solid core of buyers. But that core won’t hang on forever without an updated product.

A theory I like to espouse around the coffee pot, and it is truly 100% conjecture on my part and just one of many plausible scenarios, is that GM will derive new vans from the same platform used by its fullsize pickups and SUVs. Part of the $1.2 billion investment the automaker has announced for both its Arlington, TX, and Ft. Wayne, IN, plant -- presumably the Silao, Mexico, plant will be added to the list of major investments at some point -- could include bringing on those vehicles at one of those facilities. Depending on how GM’s planners view long-term needs, the automaker might prefer to devote the entire Wentzville plant to pickups.

The big pickups and SUVs are due for their next overhaul in 2019, and it is likely the thrust of the Arlington and Ft. Wayne investments has a lot to do with meeting 2025 CAFE and emission standards. Consolidating them on that platform might serve to lower the cost of an overhaul and let GM keep control over their design and manufacturing, while readying them for 2025.

And if the market someday does go fully autonomous, a sleek, efficient 10-passenger people carrier or urban lightweight cargo hauler might be just what the doctor ordered.

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