AF: AN: Is FCA making a minivan mistake? [includes recent spy shots] | Allpar Forums
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AN: Is FCA making a minivan mistake? [includes recent spy shots]

Discussion in 'Mopar / FCA News' started by Allpar News System, Feb 2, 2015.

  1. Allpar News System

    Allpar News System Automated System

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  2. Ian

    Ian Car Freak

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    Why is that a question? It's a fact!

    Perhaps FCA US should consider the value of all of the customers in the U.S. and Canada and re-think its pricing strategy.

    I really think it should be re-think for sure. There is still a market for the GC.
     
    jerseyjoe likes this.
  3. md80891

    md80891 Active Member

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    it is a mistake of the grandest scale. fca currently controls 52% of the mini van segment nobody in their right mind gives up that percentage of share. in opening up the lower end of the segment you to outside competition you also open the top to further competition in the future. Hyundai kia,s learning curve is already demonstrated and they just trounced us in mini van test at m/t. hey but it could be more of the large margin low volume mindset that is the world view these days.
     
    jerseyjoe likes this.
  4. CDJSalesPro

    CDJSalesPro Allpar Legacy

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    You know it is quite possible that the powers to be are simply playing their cards close to their chests. This is not new news. I am sure mangement has thourghly looked at the market and the numbers. Just becuase they havent revealed their plans(market strategy wise) dosent mean they dont have a plan. Sometimes its good not to let the competition know what we are doing. The Hellcat wouldnt be so hot if they leaked a year and a half out that they were going for 700hp..giving the competion time to build their 750hp fighter....

    It would be bad business to let Hyundai and Kia know what our intentions are regarding pricing of the lower segment. If they(FCA) keep their mouths shut it gives them less time to respond in kind. I wouldnt be surprised if FCA has a low 20's entry level product that they are going to introduce. It might even be named diffrently than the T&C....who knows perhaps something crazy like "Caravan"
     
    #4 CDJSalesPro, Feb 2, 2015
    Last edited: Feb 2, 2015
  5. valiant67

    valiant67 ...

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    Good question. I know they want to increase margin per vehicle. But I think the general public (not necessarily us supporters) only look at Chrysler (OK, FCA USA LLC) products when they are a "bargain". I've heard that from several people - the current van (either Grand Caravan or Town & Country) beats the competition on price. Not that it's a better van, though the people do seem to like the Pentastar engine, but they are willing to give up on some Honda or Toyota features for the lower price. The 200 was supposed to get away from the discounting - but Chrysler has been so inconsistent for many years, the discounting is what drives the sales (see late 2014 incentives on the 2015 200).

    Chrysler needs to bump prices/drop lower trims slowly. For the same reason they can't be a credible "luxury" brand Chrysler can't become a "higher margin" mainstream player either. Too many years of outdated products, inconsistent brand philosophies, models names that change at the drop of a hat, etc.
     
    UN4GTBL likes this.
  6. Ian

    Ian Car Freak

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    You are right! It would be quite the surprise as Kia is banking on the death of the Grand Caravan to get the low priced minivan market. It would be a nice surprise to have a new generation GC and T&C. I'd love an AWD Grand Caravan.
     
    UN4GTBL likes this.
  7. Dave Z

    Dave Z It's me, Dave
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    That said, you could say the same about dropping the short wheelbase minivans.
     
  8. md80891

    md80891 Active Member

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    t/c cost of ownership over five years is right at the top. this would be to its superior residual value which is directly tied to public perception. but if every body wanted a t/c then the split would not be 50/50. caravan is the more recognized name. mb is coming with a van maybe there will be an alfa romeo version to save us......................
     
  9. serpens

    serpens Well-Known Member

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    Meh. That would be interesting but even Kia has been upping their prices a bit in recent times. It should tell you something that the cheapest Sedona you can buy is still $26,100. They didn't even try to get near the Grand Caravan.
     
    dodgeatheart and Ian like this.
  10. bumonbox

    bumonbox Say no to kool-aid
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    Anyone who's seen my postings knows where I stand on this. If the new T&C is supposed to be so groundbreaking, it's going to be hard, near impossible to balance a low entry level with the upper levels. And I don't forsee it happening. Likely the T&C will indeed go head to head with the competition price wise. That's all well and fine.
    So now, queue a comment about not chasing volume, and going for profits. At which point I reply about how simplistic a view that is. One cannot simply wake up and decide to build a business model solely around making nothing but profitable products. To do this, your business model must have already built up a reputation to command a premium on each and every one of their products. Chrysler does not, and may not ever have this. But that may not be a bad thing... Why?

    Look at banks, or many such companies. Most of the checking account products they sell their customers are almost assuredly going to make them squat. Instead, it is a gateway to establishing a relationship with which to role the customer in the more, higher profit products. Chrysler isn't Toyota and Honda, and should not strive to be. Even though quality ought to improve. They should not lose site of a market they have cornered, even if not hugely profitable. The thing that most continue to forget is that Sergio's "masterful" work, the success Chrysler has enjoyed is not really his vision. Not his ideal image. It is quirky, and he has hardly shied away from making it known.

    If Chrysler were any other company, it probably would not have so many bloody lives. It's quirkiness is the very life blood that has helped to stave off death until someone could help pull it up. Which Sergio did, but using largely tools that were already present in the shed. I applaud him for figuring out how to use them, but fear he didn't learn to respect them enough - intending to toss them out, only to discover down the road just how helpful they were.

    Sergio wants to go up against Toyota and Honda - he wants to model the T&C after their formula. And there is precisely where I get confused. As much as I love the Chrysler Minivans, it's not like Honda and Toyota haven't been trying and innovating. I think I misunderstands the source of Loyalty of his customers. Chrysler is effectively leveling the playing field for it's competition, pitting what it presumes to be customer loyalty against the titanium reputations of Toyota and Honda. It's quite dangerous - and if it decides those customers aren't important, it is chipping away at it's loyalty. Much like Jeep, Sergio is placing the bar squarely with in reach of it's competition. Even if the next single minivan is incredible, Honda could simply outrace them.

    Ask yourself. Why has Ford enjoyed ruling the Pickup truck and full sized van market? Is it because they are the best, or a well formed relationship strengthened in part by offering all of it's customers what they want. It wasn't about being the best. I don't like Ford, but they were good enough, and have retained a strong bond.
     
  11. Ian

    Ian Car Freak

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    I agree but it would be interesting to get the numbers of CVP/AVP sold compared to the rest of the trims. I see 8 SXT/Crew/RT vans for about 2 CVP here in Canada (Ottawa) which would be close to the Kia's base price.

    I am seeing a huge fleet of T&C at the rental agencies though.
     
    UN4GTBL and Mopartial like this.
  12. TripleT

    TripleT Allpar Legacy

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    If the new van has to demand higher margin then the GC. Otherwise the capacity should go to something that can.
     
  13. tomit

    tomit Well-Known Member

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    Something similar to the Promaster city wagon with a 3rd row?
     
  14. dana44

    Ad-Free Member

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    Well, I guess if you are going to give up on a well selling product and make a mistake, might as well make it a big one.
     
  15. Mopartial

    Mopartial Fits and Finishes

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    Of course it's a mistake. Since when is kissing goodbye to 100k sales a brilliant move?

    And the "Don't-Worry-The-T&C-Will-Cover-For-The-Loss" argument is pure fantasy, as is the
    "Lower-volume-equals-higher-profits" delusion.
     
  16. bumonbox

    bumonbox Say no to kool-aid
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    I've been more to open than the idea. This is the tough part of a news and rumors forum. All we can do is offer conjecture based off what info is presented to us. On one hand, we've had a couple rumors, and some unclear comments of Sergio to support the idea that the RT could live alongside the RU for a bit. Problem is, we've been here before, and the original statements became true, and the mainstream comments still say the GC is dead.

    More often than not, the optimistic conjecture and rumors are usually a product of our desire to be positive rather than reality. And will assess and react accordingly. And if he surprises us, then I'll react positively at that point. I am just not sure this is the kind of product that is likely justify that kind of secrecy, it's the antithesis to the Hellcat, based more on practicality than passion. But, indeed, we'll see.
     
    erhemi likes this.
  17. tazdevil

    tazdevil Member

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    The numbers speak for themselves. It's not a mistake, it's a colossal blunder, sure to cost sales and customer loyalty. Financial considerations leave no room for customer relations. Unbelieveable!
     
  18. red-jk

    red-jk Well-Known Member

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    Why not slot the passenger version of the ProMaster City at that price point?
     
    tomit likes this.
  19. Erik Latranyi

    Erik Latranyi Allpar Legacy

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    Here is the real potential mistake......launching the next Town & Country and not having the Dodge Grand Caravan replacement (CUV) ready at the same time.

    This will tell us how serious they are in retaining customers.
     
  20. ScottB

    ScottB Active Member

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    Chrysler no longer wants to be #1 in the segment it invented and has dominated since 1984. They're giving up to focus on something else.......like pouring a ton of money down the Alfa rat hole that will have a negative return on investment for years to come.
     
    #20 ScottB, Feb 2, 2015
    Last edited: Feb 2, 2015

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