Ford Fairlane sport wagon
Rebecca Cook  /  Reuters file
Is this the new face of minivans? Ford will reportedly replace its struggling minivan lineup with the retro-styled Ford Fairlane three-row sport wagon in 2008.
By Roland Jones Business news editor
msnbc.com
updated 7/13/2006 3:06:10 PM ET 2006-07-13T19:06:10

Often maligned for a seriously un-hip image, the minivan has been the vehicle of choice for a generation of suburban families. But the car with the soccer-mom image and Dustbuster styling might soon find itself left in the dust.

The main culprit: America’s newfound fascination for crossover vehicles, which blend the ride and style of a passenger vehicle with the practicality of a sport utility vehicle. Crossovers are now the fastest-growing segment of the U.S. vehicle market, while minivan sales are static.

The sector lacks originality, notes Tom Appel, editor of Consumer Guide Automotive, a service for automotive buying advice. Automakers have resorted to propping up flagging sales with hefty discounts. The market segment, which now accounts for 7 percent of light vehicle sales, could shrink further when Ford launches its Fairlane sport wagon, which is expected to replace its weak minivan lineup in 2008.

“The crossover SUV has attracted attention of car shoppers lately, and minivans are starting to look dowdy,” Appel said. “No one is really distinguishing themselves in this market anymore, and there are too many similar concepts out there. The minivan is pretty much the minivan — you have two sliding doors and seating for lots of passengers.”

Launched almost simultaneously by Chrysler and Renault in the early 1980s, the minivan found its target market in the suburban baby boomer families looking for greater fuel economy, space to ferry their kids around and styling that didn’t remind drivers of their parents’ station wagons.

Today, those boomers have seen their children grow up and leave the nest, and ironically the same stigma that first drove Americans to minivans may be driving them away again, says Joanne Helperin, editor of Edmunds.com’s Women’s Car Guide. Families with young children simply are not attracted to the minivan their parents drove.

And the new crossovers are more attractive, Helperin said. “These cars are trying to be the best of all words — they have a car-based chassis instead of a truck-based chassis. They are not bulky, and they are agile with serious horsepower,” she said.

The most popular crossover vehicles include the Toyota Highlander, the Nissan Murano and Honda Pilot. Other vehicles that could chip away at the minivan market include cars like the Chrysler Pacifica, or the considerably more expensive Mercedes-Benz R-Class.

Established minivan modelsalso face stiff competition from competitively priced Korean imports like the Hyundai Entourage, which is priced at around $25,000 including a 3.8-liter V6 engine, front and side-curtain airbags and antilock braking, said Appel. Comparable equipped minivans from manufacturers like Chrysler or Toyota can cost over $30,000.

“[These minivans] are representing a serious threat to the dated domestic vehicles still on the market,” Appel said.

DaimlerChrysler, which was the first to market with a minivan, still dominates the market with with its Dodge Caravan and Chrysler Town & Country models, which hold a combined 37 percent share, according to Power Information Network. But the company will struggle this year to sell 450,000 units, down from 550,000 in the mid- to late 1990s, when it sold all everything it could produce.

“They have let their minivans go stale,” Appel said.

Chrysler’s minivans are expected to be redesigned in 2007 and 2008 by Ralph Gilles, who designed the celebrated Chrysler 300.

After Chrylser, the Japanese makers are the biggest players in the field. The Honda Odyssey held a 15.7 percent share of U.S. minivan sales in 2005, while the Toyota Sienna had 14.5 percent and Nissan's Quest about 3.6 percent.

Hyundai’s Entourage mainly takes aim at Toyota and Honda’s minivans. The minivan opens a new segment for Hyundai, one key to its growth plans, said John Krafcik, vice president for product development and strategic planning for Hyundai Motor America.

“We had a five-sedan lineup until very recently. ... That is not where the growth in the U.S. market is going to be,” Krafcik said. “For us to continue to grow ... we have to get into segments where we have been underrepresented.”

With Hyundai looking for gains in the bottom end of the market and Toyota and Honda assailing Chrysler, “wouldn’t it be ironic if the Koreans took hold of the bottom end of the market and the Japanese took the top end, and the country that invented the minivan was left with what’s in the middle?” said Appel.

Rebecca Lindland, automotive analyst at consultancy Global Insight, doubts whether the minivan will ever disappear entirely. As long as there are families, there will be demand, she said, and while drivers may not always aspire to owning a minivan, the demand remains, she said.

However, overall minivan sales could drop significantly as a result of Ford’s decision to move ahead with its Fairlane, which was first shown as a concept vehicle in the 2005 auto show circuit. The retro-styled three-row “sport wagon,” which is nothing like its namesake of the 1950s and 1960s, is expected to be launched by 2008.

Ford plans to aim the “modern people mover” at the same target audience that would purchase a minivan. “The world of today is not the world of 1985 — or even 1995 … the needs and wants of families with young children have evolved,” Ford said in a statement.

Reuters contributed to this report.

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