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On Dodge dropping Caravan

by Bill Cawthon on

The cancellation of the Grand Caravan was inevitable for two good reasons and two “okay” reasons.

The first good reason: the migration of the dealer body from standalone brands to full-line outlets meant that franchisees were selling two almost-identical vehicles. It ended up being like a GM dealer selling GMC and Chevy light trucks: it might work for the pickups, but what about the Express/Savanna G-series vans?

GM discovered this with Avalanche: instead of conquest sales adding to the sales of the Silverado and giving Chevy top-sales bragging rights, the Avalanche cannibalized Silverado sales. Silverado, which had been a close second in pickup sales, became a distant second.

2011 Dodge RT Line

The second good reason: the cost of a second line in a contracting market segment becomes difficult to justify. If Chrysler kept two lines of minivans, they would have to be separated not just in looks (and there, it would have to be more than grille and badges), but in some other, meaningful, expensive to engineer (and tool) way. On top of product costs, there’s also the cost of promotion, including literature (brochures, owner’s references, etc.), online marketing and other expenses. They may not cost as much as a major TV campaign, but the investment is still fairly hefty.

The cost savings are important. Sergio Marchionne, with John Elkann’s blessing, has committed the company to a huge investment program over the next five years and he says it will be accomplished with existing assets. This means adherence to a strict diet, eliminating any costs that won’t jeopardize the gains Fiat Chrysler Automobiles has made or hopes to make in the market and in customer/media perception.

As a side note, there’s nothing in the rule book that says the minivan couldn’t be sold as a Dodge in Canada, where the Caravan is clearly the model of choice. A grille and some trim pieces are not too expensive in the overall scheme of things and the U.S. and Canadian marketing budgets can remain the same, with each focused on the appropriate brand and dropping the cost of promoting the other. The difference between having a Dodge in Canada and one in the US is that the Canadian Dodge would just be the Chrysler with some minor cosmetic changes. The Chrysler minivan barely moves in Canada, so it would be dropped.

The first “okay” reason is bragging rights. While the Odyssey or Sienna can beat either the Town & Country or the Grand Caravan, the unification of the Chrysler minivan sales is going to put minivan leadership out of reach for a long time to come, even factoring in the inevitable loss of customers that loved the Dodge.

Last year, the Honda Odyssey was the top-selling minivan, with 128,987 sales. The Caravan was No. 2 with 124,019 sales; the Town & Country was No. 3 with 122,288 deliveries. Even if unification had cost 50% of Dodge customers, the T&C’s volume still would have been 184,298, 43% ahead of the Odyssey.

By the way, the same is true of the 200/Avenger. While their individual sales were okay, combining them yields a true competitor in the segment. That, rather than making way for a rear wheel drive Avenger to follow Alfa Romeo’s entry, may be why the Dodge was dropped.

The second “okay” reason is the need to make Dodge a coherent brand. Tim Kuniskis made it clear that he felt Dodge should be all about performance, and minivans do not evoke performance, no matter how many times Gus Mahon outraced Mustangs with his Caravan at the drag strip. Despite Ralph Gilles’ enthusiastic launch, the Caravan R/T seems to have sunk without a trace. Having a Dodge minivan seems to run counter to the desired brand image. A hint of the change came in the Chrysler presentation, when the Town & Country is called a “MPV” (Multi-Purpose Vehicle) instead of a minivan, aligning it more closely with Chrysler’s new “mainstream” mission.

As a final note, various sources have claimed that around two thirds of Caravan sales are to fleets, while most Town & Countrys sell to retail buyers. The Town & Country also sells at a higher price (which may be why the fleets buy Caravans). Given that there is only one Chrysler minivan factory, which competes with other plants for Pentastar engines (and will probably be competing for nine-speed automatics as well), Sergio Marchionne may well have decided it’s better to have fewer, but more profitable, minivans rolling down the line — especially since the same plant will be making crossovers.

Dave Zatz co-authored this article.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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