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Minivans sales to stay down?

In February 2013, U.S. Chrysler Town & Country minivan sales fell by 10%, while Dodge Caravan fell by 18%; Caravan still managed to beat Sienna, and Town & Country still beat Odyssey. Sources told us that overtime is being cut at the sole remaining plant in Windsor (for many years, two plants were devoted to minivan production), and that a small amount of downtime is being considered for the summer.

The vans, once Chrysler’s sales leaders, are still a major product, but their total sales are now exceeded by Ram trucks, L-series large cars, and mid-size J-cars. Crossovers and “cute-utes” have lessened the demand for minivans, even as competition from Toyota and Honda has become stronger. Without major product changes, which do not seem to be in the works, Chrysler seems to be adjusting sales through incentives and advertising, reducing profit margins.

Adding nine-speed automatics could boost sales, but production of the ZF-based transmissions will take a year or two to reach the volumes that would be needed; early production is reserved for Cherokee, then for the upcoming Chrysler 200 replacement.

With minivans looking at lower profit margins, they are at a disadvantage to other vehicles competing for a limited number of V6 engines (Jeeps, Journeys, mid-sized cars, Rams, and large cars). Assembly lines can only be added so quickly. We do not expect V6 and transmission production to be sufficient for Chrysler’s needs until 2015 or early 2016, and even then, there might be limits, depending on the popularity of Cherokee and midsized cars.

There does not seem to be any relief for the minivans until calendar-year 2016, when the next generation “RU” bodies will start rolling out of Windsor. By then, moving to a single model, whether a Dodge or Chrysler, may be less of an issue, depending on how customers and competitors act in the meantime.

 

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