Why the Pacifica Sells Slowly - Lessons to be Learned

From what we can tell by reading the newspaper, both Chrysler and automotive analysts have come to the same conclusion: that the Pacifica is not selling well because it is priced too high for a Chrysler. We differ with this conclusion, and note as an aside that the same analysts thought mergers were a great idea until recently, when they suddenly decided that the non-merger companies were doing quite well (Honda, Toyota, PSA, and BMW), while the merger maniacs (GM, Ford, DaimlerChrysler) were having some problems. (The problem with analysts is that many were taught with the case study method, which makes it possible to "prove:" just about anything.)

Back to the point at hand - why we think the problem with the Pacifica is not price. Quite simply, as Chrysler folk have been saying for years, Chevrolet spans a range from $10,000 to $50,000, as does Ford, if you include their trucks. And that's the problem with Pacifica marketing.

It positions the Pacifica as a minivan.

The Pacifica should be shown as an SUV, positioned as an SUV, the all wheel drive option emphasized. Yes, we know it is not a truck, nor should it ever be taken off-road, but then, neither should a Lincoln Navigator, not if you want to keep it. On gravel or dirt, yes; in Jeep terrain, no. And the Pacifica can deal with gravel and dirt quite well. But the reason to show it as a truck is simple.

The standards for SUVs are lower than minivans.

Drive a Lincoln Navigator one day, then drive a Chrysler Pacifica. The difference is incredible, and it's all in the Pacifica's favor. The interior is nicer to look at, and far more functional. There seems to be more passenger room, the controls are better, the amenities are better, the ride is far better, the handling is far better, the gas mileage is better. Indeed, the Pacifica beats the Navigator and Suburban in just about every way, save actually hauling huge amounts of heavy stuff, which few buyers ever do.

The whole point of making the Pacifica was to have the convenience of a minivan, but with a hood so that SUV buyers would not turn up their noses at it. That has been achieved, along with unnecessary and expensive additions such as a load-levelling suspension and navigation system. In addition, the safety often used as an excuse by large-SUV buyers is there, in spades, with five star crash ratings all around and the only three-row airbag setup available.

The Pacifica is not a very good minivan. Compared with the Town & Country, it has worse rear visibility, costs a lot more, and is less efficient at using its full length for people and cargo. Its heavy weight takes a toll on gas mileage, so that the 3.5 liter engine yields about the same acceleration as the less powerful 3.8 in the Town & Country. But it's a great full-size SUV, if you don't need to tow or haul unreasonably heavy objects.

Now is the time for Chrysler to take advantage of the vanity of the typical large-SUV buyer (and if you think vanity is not a factor, ask why someone who does not tow or haul lumber would spend another $10,000 for an SUV when they could get a minivan with the same space, more comfort, and better mileage, handling, and ride). The Pacifica needs to be marketed against the Suburban and the Expedition, using the same types of magazine ads, TV ads, and radio ads. Make it sound tough and durable. Make it sound macho and strong and big. Emphasize the muscle and brawn and then talk about the great features.

Otherwise, it's back to the "fire sale" marketing for the next five years, while Toyota, Nissan, and Honda slowly start to dominate the large-car-based-SUV market.

Reply by Gene Poon

From the ad campaign, the impression of the Pacifica isn't that it is a minivan; somehow, without saying so, the idea is planted that it's a (horrors!) STATION WAGON. At least that is how I see it.

As the daily driver of a station wagon (a Ford product; by the mid-90s, Chrysler had long since abandoned the station wagon market, the only competent US-built wagon being the Ford Taurus/Mercury Sable), I cringe every time I see the Vehix.com TV commercial where the little spoiled brat kids whine, "I don't want to be dropped off at school in a Used Station Wagon!" But I guess the parents who have that jind of whiny spoiled kids now have a bad image of the station wagon. Too bad that somehow a classification such as a "Sport Wagon" never caught on. Blame it on Subaru, who pushed the Legacy Outback as an SUV instead of what it really is. A perfectly good, (and used, once it comes off the showroom floor) Station Wagon.

Reply by Andrew Renth

I saw the editorial on Allpar concerning the Pacifica. I have some thoughts on why it is failing.

1) I still think price is a major sticking point. The Pacifica is aimed at the families that have kids (what other reason for the 3 rows of seats), but the people that need it and would like to buy it can't afford it. The Detroit News tested one back in April before they came out. They had a panel of regular people inspect the vehicle and test drive it. Almost everybody loved it, but they said the price was too high. There was a mother of two who was in her early 30s that loved the Pacifica. She said it was perfect for what she needed, but she asked "Why did they have to price it out of my range? I can't afford a vehicle like that." The people that need the 3 rows most can't afford it (on average), while the people that can afford it don't need the three rows. [Editorial reply - research shows that a large proportion of Navigator and Suburban buyers are using them as minivans, so it is not totally unreasonable to try for these sales with a Chrysler - if Chrysler is a premium brand.]

2) It looks like an overgrown, bloated station wagon. To my eyes, it does not look like an SUV. It looks like an alternative, but what do you gain, except for ride and styling? I don't think people are ready to buy station wagons yet.

3) Is it the kind of vehicle the public has been asking for? Meaning, is there a demand for it? I know you said people were asking about the one you were driving, but out of that crowded crossover market, is it THE one? What makes it head and shoulders over the competition like the Lexus RX330, Infiniti FX, Nissan Murano, etc...? I have heard people say that the Pacifica does many things well, but not one thing great. The FX is known as a fast SUV - that is its calling card. The Lexus RX330 is known as the benchmark of the segment, if you get my drift. What makes the Pacifica stand out?

4) One major problem I have, and this concerns management and Chrysler employees, is this optimistic mindset that it was going to blow the market away. It was going to be a segment buster. Nothing was going to stop its momentum once it got into the market. Instead, the market yawned. I think the optimistic viewpoint of 100,000 units a year was a big mistake. Auburn Hills thought it had a hit even before it hit the market. If they would have said they expect 40,000 to 50,000 units a year, then I don't think there would be a problem. That number is a little more reasonable. But 100,000 units means that it would have to outsell the Lexus RX330 (a high of 80,000 units in 2000) which is the segment leader and innovator. What were they thinking? Did their high arrogance get in the way of common sense? If they would not have had such high goals, they probably would not look as bad. This doesn't affect the sales of the vehicle, but it sure makes DCX look like bad.

[Editorial addition: Part of the problem is that, while cars like the Neon and PT generated a lot of buzz before they were created, partly due to creative and exhaustive press kits, the Pacifica was greeted with a few brief sheets. We did not receive a press kit at all, just a notification that information was posted at the media site, which by the way defaults to Mercedes for new users. Test cars were not available until well after launch. We suspect that "cost control" on the launch publicity was a major reason why people don't know what the Pacifica is, what it does, or, most important, why they should buy one.]

5) There is a problem with this bad launch of the Pacifica. I know most people on Allpar say not to worry. It will pick up eventually. Apparently they don't see what the competition is bringing out in a few years. Ford will have its Freestyle crossover out sometime next July (estimating). That gives the Pacifica about a year to get momemtum before the Freestyle comes out. I know most people on Allpar underestimate Ford, but I think Ford will push this offering when it comes out. I also don't think Ford will price it in the high $30,000 range like the Pacifica. Try high $20,000 range. I hope Ford is not that stupid. Ford will fill a void in the crossover segment. They will sell it to families that need it AND can afford this wagon/SUV/minivan. Ford sells to the average Joe. Contrast that to the Mercedes mentality that only wealthy people deserve a vehicle like the Pacifica. After the Freestyle, Chevy will introduce its PT Cruiser like thing. I'm not sure how strong of a sales magnet this thing will be, but I don't think Chevy will price it in the $30,000 - $35,000 range either. So, to compete against the competition, Chrysler will have to lower the Pacifica prices. But then, Chrysler won't be a premium brand any more. It won't have the image to compete against Cadillac, Lexus, Infinti, and others. So, the marketing people are sending mixed signals about the Chrysler brand to the market which isn't good. Then, Lincoln will have a crossover in the next few years to further clog up the premium segment. In short, Chrysler marketing and product planning screwed up. Advertising, product positioning, pricing,the list goes on and on. It almost seems like they don't care if they fail or not. Compare that to the new F-150 that is coming out. Ford did a bang-bang job on this truck from what I've heard. They are showing it everywhere and to everybody before they get to the showroom. The advertising campaign will cost how many millions of dollars, while no screw was left untouched on the new truck. They spent money because they know the F-150 is the savior of the company. The Pacifica may not be that important, but when it and the Crossfire are the only new vehicles from the Chrysler Group (along with the late arriving Durango, which looks like crap) to hit the market in 2003, it better have some corporate support!

One last thought. The Pacifica better be built to perfection if it is going to compete against the big boys. From what I hear, there are starting to be patterns that aren't too favorable to the Pacifica's build quality. I've read of several people complaining about weak FM reception on their great stereo units [we haven't had this issue]. That may be nitpicking, but if you shell out $35,000 on a Chrysler instead of moving up to a Lexus, the radio better be near perfect.

I have heard of some Pacificas where the door jams, underneath the hood, and gas cap were not painted!!!! There was grey primer there instead of the dark blue paint. I think the lady complaining posted that on Allpar. How in the world can you let a car (and a loaner) out of the plant without those parts being painted? That is sloppiness. That is not world class like Dieter talks about all the time. I also read where somebody walked up to their Pacifica to find one of the plastic panels laying down on the floor on the passenger side. It must have fallen off!!! A $35,000 vehicle should not have plastic panels falling off the interior. I know some people will say that all brands have those problems, but these brands do not have the baggage that Chrysler has. With the expertise of the Germans (one of the reason for the "merger"), these things should not happen any more. [Unless you notice that Chrysler quality is higher than Mercedes quality according to every objective report we've seen.] What's happening? I've also read some small reports about rattles in the dash - the infamous Chrysler curse that they still can't seem to fix. I read these on Edmunds forums, by the way. Isolated cases? Maybe, but this shows me that nothing has changed in Auburn Hills. They still take the customers for granted and try to hypnotize the public with "daring" and innovative vehicles and fancy sound bites about how Chrysler is sooooo much improved. I have to wonder if it is or not. I think the public is thinking that as well.