By on July 14, 2007

ch008_018tc.jpgThe Boston Globe says Chrysler’s 2008 minivans are set to arrive at dealer showrooms with more features– extra air bags, electronic stability control, seats that swivel six ways to Sunday– and sticker prices averaging $2k below ‘07 models. The official party line: the price reductions will improve residuals and lower incentives (current average: $4,400 per vehicle). Yes BUT—Chrysler’s current family taxis are already sold at bargain prices. Base vs. base, the Caravan’s less expensive than a Toyota Sienna (-$4,400), Honda Odyssey (-$5,900) and Hyundai Entourage (-$4100). How can everyone else sell their minivans for thousands more than the company that invented it? The answer has very little to do with the price, indicating that Chrysler's financial salvation does not lie in offering bigger discounts– or more spin.

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11 Comments on “Chrysler’s Minivans Going Cheap...”


  • avatar
    SherbornSean

    Yes, but Chrysler’s base model is not the same as Honda or Toyota’s. The base Caravan/T&C has a smaller engine and less equipment. I’ll wait for True Delta’s analysis before I believe that Chrysler is THAT underpriced vs. competitors.

  • avatar
    Steven Lang

    The above poster is absolutely right. Chrysler’s base model is a very different bird than the base Sienna and Odyssey.

    However, I wouldn’t consider put it past Chrysler to start up a price war to build marketshare. There is a lot of company interest in becoming the undisputed leader in the minivan market. Let me emphasize this. CHRYSLER WANTS AN ABSOLUTE HOME RUN to put their company back on the map.

    I think they’ll get it this time.

  • avatar
    Dynamic88

    Chortle – Chrysler is going to take market share from Toyota and Honda – Chortle. Right, that’s why they have to give $4K in incentives to get people to buy the things now.

    One wonders if the big 3 will ever get it into their heads – the competition is about quality, not price. Go ahead, reduce margins and find you don’t sell a significantly greater number of vans.

  • avatar
    Steven Lang

    Hate to tell ya, but I’ve seen said vehicle at an auction in Atlanta (that specializes in handling the Chrysler account) and it will most definitely take marketshare away from both those brands.

    As for quality, I won’t bore you with Toyota’s cheap interior fittings or the Odyssey’s transmission problems. Neither vehicle has been particulalry high in quality. In fact even the Ford Windstar of times past has beat both of those models repeatedly in J.D. Power’s durability studies.

  • avatar
    Dynamic88

    And yet neither Toy or Hon need to give $4K in incentives to move their vans. That’s why I’m sceptical that significant market share will be taken. (some share, yes. Cupon clippers are everywhere, including auto lots) And Chrysler has had quite a few problems associated with it’s vans as well. We’ll see what happens. It would be nice for Chrysler if I’m wrong – they could really use the revenue stream. Oh, wait, how much revenue is left, selling on thin margins?

  • avatar
    Alex Dykes

    Excellent move by Chrysler. Now if they could only manage to get more oomph out of a 4L V6…

  • avatar
    Adrian Imonti

    I’ll wait for True Delta’s analysis before I believe that Chrysler is THAT underpriced vs. competitors.

    You don’t have to wait for True Delta. If you go onto Dodge’s, Toyota’s, Honda’s and Hyundai’s websites for these models, they all clearly display their base MSRP’s.

    The issue isn’t whether the Dodge/Chrysler twins are the apples-to-apples to Honda et. al. There’s no argument there at all, as they aren’t even close.

    That’s the funny thing about this announcement. At the press conference, the Chrysler rep talks about the price as if to imply that they have trouble competing at such high prices. Meanwhile, the Dodge website touts the Caravan as the lowest priced minivan in America. They’re already positioned as the K-mart of the segment, and I don’t see how it’s supposed to help them by downgrading themselves to Pic ‘N’ Save status. If your new product is that good, then take a bit of pride in it, and price it on par with the competition.

    My guess is that unless the new minivan is head-and-shoulders above the current one, those incentives won’t be dropping by much, even if the prices fall through the floor. People who buy Odysseys and Siennas didn’t choose them because they considered them to be a bargain.

  • avatar
    MLS

    You don’t have to wait for True Delta. If you go onto Dodge’s, Toyota’s, Honda’s and Hyundai’s websites for these models, they all clearly display their base MSRP’s.

    The issue isn’t whether the Dodge/Chrysler twins are the apples-to-apples to Honda et. al. There’s no argument there at all, as they aren’t even close.

    Wrong again. The Dodge minivans are offered in two different wheelbases: Caravan and Grand Caravan. The short-wheelbase Caravan starts at $19,770. The long-wheelbase Grand Caravan—the model that most directly competes with the base Odyssey, Sienna, and Entourage in terms of both size and standard equipment—starts at $24,420. Granted, this MSRP is $1,225 less than Honda’s, but is also $265 more than Toyota’s and $525 more than Hyundai’s. The entry-level, long-wheelbase Chrysler Town & Country starts at $26,805—a full $2,385 more than its Dodge counterpart, and considerably more than the three other aforementioned vans.

    So, SherbornSean was right: the Chrysler vans, before discounts, are not so under-priced versus their competitors. Your comparison was indeed apples-to-oranges.

    That being said, Chrysler’s current incentives are certainly too high; indeed, they damage both resale value and brand equity. Hopefully the 2008 vans’ increased equipment levels and reduced MSRPs will help to end dependence on unsustainable incentives.

  • avatar
    Adrian Imonti

    MLS, that would be like claiming that the Accord isn’t beating the pants off of the Impala because the Accord is too small to be compared to it. (For what it’s worth, an Impala is about 9 inches longer than the Accord.)

    The issue isn’t the length of the minivan, it’s the fact that the company that invented the product now has to toss around gargantuan incentives in order to sell them. Long van or short van, they still have to pay big incentives to sell both.

    The minivan helped to save Chrysler in one of its many near-death experiences. Since then, the company has clearly handed all of the brand equity that they built to the new brand leaders Toyota and Honda.

    If the product is that terrific, then it shouldn’t need price slashing to sell it. If the only thing that Chrysler has to offer the market is a low price, then it’s in the same boat as it has been before. Why bother with a new product launch when you’ve decided that it can’t compete on its merits before you’ve even started?

  • avatar
    MLS

    The issue isn’t the length of the minivan, it’s the fact that the company that invented the product now has to toss around gargantuan incentives in order to sell them. Long van or short van, they still have to pay big incentives to sell both.

    As stated in my last post, I agree that Chrysler is too dependent on incentives. I took issue only with your claim that the vans’ base MSRPs were $4-5k less than the competition’s. If you compare similarly equipped models, the base MSRPs are actually quite similar.

    If the product is that terrific, then it shouldn’t need price slashing to sell it. If the only thing that Chrysler has to offer the market is a low price, then it’s in the same boat as it has been before. Why bother with a new product launch when you’ve decided that it can’t compete on its merits before you’ve even started?

    It’s unfortunate that Chrysler (and GM and Ford) focuses almost exclusively on price in its advertising. I would have preferred that the latest press release on the new vans highlight innovative features like Swivel ‘n Go rather than price cuts, but at least the company is making an effort to realign MSRPs with real-world transaction prices. No one has driven the new vans yet. If they turn out to be great vehicles, then Chrysler shouldn’t have to offer much in the way of incentives. Over time, they might even increase prices to match Honda and Toyota.

    For what its worth, the 2008 Grand Caravan (the short wheelbase has been discontinued) will start at $22,470, while the new Town & Country will sticker for $23,190. After current NY Metro area incentives, the base prices for the 2007 competition are as follows: Sedona (long wheelbase) $22,795; Sienna $22,655; Entourage $21,895; Quest $21,350.

    If, after the MSRP cuts, Chrysler can abandon its current rebate structure, I’d say their new vans will be priced right on par with the competition.

  • avatar
    windswords

    “If the product is that terrific, then it shouldn’t need price slashing to sell it. If the only thing that Chrysler has to offer the market is a low price, then it’s in the same boat as it has been before. Why bother with a new product launch when you’ve decided that it can’t compete on its merits before you’ve even started?”

    Yes, I agree. If the Toyota Tundra is such a great truck why it shouldn’t need to compete on price. Oh wait… we’re not talking about Toyota are we? Sorry I forgot, when Toyota does this, it’s crafty marketing by those oh so clever Japanese. When Chrysler does it, it’s a sign of desperation from those clueless Americans. Sorry about the comparison with Toyota, what got into me?

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