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Is FCA making a minivan mistake?

by Bill Cawthon on

Automotive News Larry Vellequette wrote that FCA US is giving up on the low end of the minivan market when the 2017 Chrysler Town & Country takes over as the company’s sole minivan next year (as reported by Allpar two years ago).

According to Chrysler brand chief Al Gardner, the new Town & Country will have a base price of around $26,000, which is $3,000 less than the current starting MSRP, but $4,600 more than the Dodge Grand Caravan American Value Package and $1,800 more than a Grand Caravan SE.

It’s a huge increase over the Canadian price of Grand Caravan SE Plus, which has a base price of C$22,060. A base Chrysler Town & Country Touring has a Canadian price of C$35,095.

Is it any surprise that Chrysler Canada sold 51,759 Dodge Grand Caravans last year but only moved 8,944 Chrysler Town & Countries?

Totaling up sales in the three NAFTA region countries (U.S., Canada and Mexico) the Grand Caravan outsold the Town & Country by 36,304 units. And the Grand Caravan isn’t even sold in Mexico.

Mr. Vellequette quoted Mr. Gardener as saying, “The reality is that the [American Value Package] is a very difficult price point to get if you’re going to build the technology, the content, the vehicle, the platform that we want to build. … those customers are wonderful customers for us, and we would love to be able to sell them something, but it may not be a Town & Country, if we look at the segment. That price point is really hard to do, and none of the competition can do it either.” [The 2017 minivans are expected to have a standard 3.6/9-speed powertrain with optional AWD and hybrid-electric power.]

While the price points of the American Value Package and its Canadian counterpart may be hard to hit, there’s little good reason not to keep the entry level equivalent to the Grand Caravan SE. The Mazda5, which is a smaller minivan, and the Ford Transit Connect Wagon, a passenger conversion of the Transit Connect commercial van, have models priced less than the Grand Caravan SE, but they can’t compete with the content and value offered by the Dodge minivan.

What Gardner is looking at is the prices of the Honda Odyssey and Toyota Sienna, the primary competitors to the Chrysler minivans. Both of those have base prices around $29,000, comparable to the Chrysler Town & Country. But 134,152 customers didn’t want to spend the money on the Town & Country, Odyssey or Sienna.

In Canada, the competition isn’t even close and, as a result, the Dodge Grand Caravan accounted for 59% of all Canadian minivan sales in 2014.

What Gardner may have forgotten is that the average transaction price for a new vehicle in Canada is more than $3,000 less than it is in the U.S.

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

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, 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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