Anyone who cruises down the street of a U.S. suburban subdivision today will note the absence of minivans in driveways, but maybe General Motor Co.'s vice chairman Bob Lutz is too busy to notice because he believes the consumer still demands them, according to a post on GM's FastLane blog.
Talk of GM retreating from the minivan business started earlier this year, when rival Ford Motor Co. announced it will end production of its minivans in 2007. Both automakers have been forced into the backseat in the market for people movers as DaimlerChrysler, Honda and Toyota have come to dominate the market. Actually, the American makers find themselves in the third row of seats, as even Nissan and Hyundai have more market share.
Even before the class became passe about a decade ago, GM and Ford never had success in the market for minivans as they were always playing catchup with rival Chrysler, who introduced the first minivan in 1983. As a matter of fact, a Wikipedia writer sardonically notes that GM's models may have been more popular as Matchbox cars than the real thing.
Interestingly, it was Ford's introduction of its Explorer SUV in 1991 that began the end of the minivan's eight-year reign over American driveways. Oddly, Lutz's rambling blog entry seems to recognize the trend and even admits that there is a "stigma" associated with minivans. He even acknowledges that the public prefers SUVs and crossovers to the minivan, and discusses GM's latest offerings of crossovers capable of seating eight people that will continue to steal market share from the minivan. However, he remains defiant, and refuses to cut the vans from the lineup.
It's this backward thinking that has put GM in its current predicament. GM is struggling to turn a profit and remain competitive. Aside from a few rental car firms, few customers want minivans. In order for dealers to move these monsters, GM is forced to offer incentives and rebates that cost it money. Of course, Lutz's thinking shouldn't be too shocking. After all, it was under his guidance that he introduced minivans into the Buick and Saturn lineups even as sales of minivans at Chevy, GMC and Pontiac weakened.
Until GM realizes that it needs to thin its herd, it will remain on shaky ground. —Matthew Wurtzel
See post from GM's FastLane
See GM Dealwatch
See item about Ford's minivan from Dealscape
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