Chrysler Minivans: Lower Price, More Stuff
July 12, 2007

Chrysler Group one-upped competitors today in announcing it has lowered prices an average of $2,000 and added standard features to its fifth-generation 2008 minivans that go on sale in September.

"The new starting price of $22,470 puts Chrysler at a significant advantage over its competitors as it is the second lowest starting price of any minivan,” said Alex Rosten, Edmunds.com’s manager of pricing and industry analysis. “That low price will certainly appeal to young families and bargain hunters. Plus the standard equipment list is pretty substantial.”

Steven Landry, Chrysler’s executive vice president of sales, said this morning the lower pricing is an effort to more closely align the Manufacturer’s Suggested Retail Price to transaction prices. Chrysler hopes to offer little or no incentives on the minivans, which Landry called this year’s most important product launch for the automaker.

STARTING MINIVAN PRICES - LOWEST TO HIGHEST
(Base MSRPs excluding destination fees):
1. Kia Sedona: $20,495
2. Dodge Grand Caravan: $21,740
3. Hyundai Entourage: $23,895
4. Toyota Sienna: $24,155
5. Nissan Quest: $24,350
6. Honda Odyssey: $25,645

Source: Edmunds.com

Chrysler's 2008 vs. 2007 prices

Landry also said the intent with Chrysler's 2008 models was to simplify minivan offerings. To that end, Chrysler has dropped short wheelbase models and is only offering the Dodge Grand Caravan, available in two versions, and the Chrysler Town & Country, with three versions.

Prices for 2008 model compared with 2007 version are as follows:

Dodge Grand Caravan  SE – $22,470 (including $730 destination charge) vs. $24,420; Chrysler calls it a $2,070  better value than its predecessor at $1,950 lower MSRP;

Dodge Grand Caravan SXT - $27,535 (including $730 destination) vs. $28,505; $2,015 more content at an MSRP that is $970 less than its predecessor;

Chrysler Town & Country LX  - $23,190 (including $730 destination vs. 26,775; an MSRP that is $3,585 lower than its predecessor with $400 of additional standard features. 

Chrysler Town & Country Touring - $28,430 (including $730 destination) vs. $29,265; offers $2,395 better value than its predecessor at an $835 lower MSRP than the outgoing model. This is Chrysler’s volume-leading minivan;

Chrysler Town & Country Limited - $36,400 (including $739 destination) vs. 37,335; $2,350 added content at an MSRP $935 lower than its predecessor.

Minivan outlook

Landry is optimistic -- maybe too optimistic -- about the minivan's future. He predicts it will maintain its roughly 1-million-unit-a-year rate and could enjoy a surge between 2010 and 2012 as the children of baby boomers are at the peak of their child-bearing years.

Landry wouldn’t predict if Chrysler would gain minivan market share with General Motors and Ford dropping its minivan offerings. "We expect to stay the leader in minivans," he said.

Landry’s outlook may be too rosy, however. Minivan market share of the entire U.S. market has been in steady decline since 2004, according to Edmunds.com figures. For the 2007 calendar year to date, sales are down 20.4 percent, largely due to the fact that General Motors and Ford abandoned the segment.

“I’d be surprised if overall minivan sales broke 900,000 units this year,” said Edmunds.com’s Rosten, adding minivan sales missed the 1-million mark in 2006.

What’s more, incentives on minivans are among the highest in the industry. They hit an all-time high in April at $3,905 per unit, according to Edmunds.com’s Total Cost of Incentives, which considers all of the promotional money an automaker puts into a vehicle. It dropped only a bit in June, when it was $3,227.

MINIVAN INCENTIVE AND SALES HISTORY

Source: Edmunds.com

Current hefty incentives on all minivans are in response to slowing sales, which Edmunds.com’s does not forecast as improving in the next couple of months. Edmunds.com’s study of consumer intent, which looks at customer shopping behavior on its Web site that generally translates to sales in the following month or two, shows interest in minivans is waning.

Still, Chrysler is position to capture minivan share with GM and Ford out of the market, Rosten noted, adding it already has. Dodge's minivan share is up 5 percentage points in the first half of this year.

Chrysler’s Landry hinted that the automaker might launch a special conquest program to lure GM and Ford minivan buyers to Chrysler’s new offerings.

Landry said Chrysler's sell-down of 2007 models is on target, suggesting it shouldn't require bigger incentives.

Chrysler minivans: New and improved

Chrysler claims the new minivans have 35 new or improved features, three distinct seating and storage systems and innovations not offered in other minivans.

Offered are a new 4.0 liter V-6 engine mated to a minivan-first six-speed transaxle, standard all-row side curtain air bags and Electronic Stability Program (ESP). Other features include: Swivel ‘n Go seats that turn the second-row seats toward the back around a table; power liftgate; heated back seats; stain-proof upholstery; a rear backup system; Sirius backseat satellite TV with three family stations; and a power folding third-row seat

The minivans will be built at assembly plants in Windsor, Ontario, Canada, and St. Louis. Advertising launches by Oct. 1.

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