Stellantis has pointed squarely at the semiconductor shortage as the reason for the impending shift cut at its Windsor, Ont., minivan plant in April.
But even before the COVID-19 pandemic threw global supply chains into disarray, the market for minivans had been shrinking, raising questions about the future of the quintessential family hauler.
Despite the benefits of minivans, their enduring soccer mom image is reason to be skeptical about their future, said Sam Fiorani, vice-president of global vehicle forecasting at AutoForecast Solutions LLC (AFS).
“The possibility of the minivan market going away completely is there,” Fiorani said. Although the segment remains an important profit centre for Stellantis, he said, the company could still “walk away.”
No other vehicle can shuttle seven passengers in as efficient a package as the minivan, analysts say. Yet the segment’s distinction as a family-first vehicle has done little to counter flagging sales in the face of crossovers and SUVs that tick many of the same boxes — with perhaps slightly more panache.
“It’s just never going to be the booming market it once was,” said Cox Automotive Executive Analyst Michelle Krebs.
THE MINIVAN’S NEXT CHAPTER
The rise of the SUV and decline of the minivan is just the next chapter in vehicle evolution, said Robert Karwel, senior manager of the Power Information Network at J.D. Power Canada.
“Minivans did that to full-size station wagons and midsize station wagons ever since Chrysler popularized the segment in the early ’80s,” he said.
“The segment itself isn’t going to go away. There’s still a core contingent of people whose needs are best met, or only fully met, by a one-box van design.” Karwel said he expects sales to stabilize at lower levels.
Stellantis’ Dodge and Chrysler brands, which helped build the minivan segment, have for years led the way in Canadian sales. In pre-pandemic 2019, the Chrysler Pacifica and Dodge Grand Caravan — which the company has since replaced with the Chrysler Grand Caravan as the lower budget option for Canada — combined for about 31,000 sales, according to the Automotive News Research & Data Center in Detroit.
This roughly matches the combined sales of the category’s other players: The Toyota Sienna totaled about 14,500 in 2019; Honda sold 9,500 Odysseys; and Kia moved 5,000 Sedonas across the curb.
The same brands sold a third more minivans, combining for just under 80,000 sales, in Canada in 2010.
Slowing minivan sales have a major impact on Canada’s auto industry. Stellantis’ Windsor Assembly Plant has built the vehicles since they came on the market for the 1984 model year. A three-shift operation for almost 30 years, the plant eliminated the third shift in 2020, saying the move would better match supply with demand.
Supply chain problems tied to COVID-19 have further disrupted the Ontario plant. It spent much of 2021 idle because of the microchip shortage, and Stellantis gave notice to union members Oct. 15 that it plans to eliminate the second shift next spring. The automaker cited the chip shortage and extended impacts of the pandemic as being responsible for the impending 1,800 job losses. AFS expects the facility to build 129,000 minivans in 2021, down from 220,000 originally forecast. The site produced 186,965 minivans in 2020 and 311,669 in 2019, according to the Automotive News Research & Data Center.
Stellantis would not comment on any plans for Windsor Assembly or its future in the minivan segment.
In British Columbia, Anthony Wiseman, general manager of Langley Chrysler, does not see Stellantis abandoning the segment. Despite the minivan’s image, even skeptical buyers are typically quick converts when they see how they perform.
“That segment has long been one of the core brands and is going to continue, from what I can see,” he said.
Mirroring the wider market, however, Wiseman said he has seen minivan sales dip in recent years. He pointed to higher prices and the appeal of SUVs as two reasons.
Currently, the Vancouver area dealership — part of the 12-store Trotman Auto Group — is having trouble keeping minivans on the lot. Wiseman said in October he was sold out of Pacifica hybrids and had a single Grand Caravan.
Shortages have been commonplace in many categories, he said, but minivans have been among the hardest hit.
Wiseman is confident that if he had more vehicles, minivan sales would be “drastically higher.”
“It’s hard to know truly what the interest is and sale rates on these vehicles are when you don’t have the normal inventory,” he said.
Inventory problems extend beyond the border. Krebs, who is based in Michigan, said industry data shows minivans have been the least available vehicles in the United States for months.
Like many other current challenges in the auto industry, it comes down to a lack of chips, said Fiorani of AFS.
“The minivan itself is a very profitable vehicle,” he said. “However, with the chip shortage, chips have been focused on even more profitable vehicles.”
Short- and long-term industry trends might also spell the end of the budget minivan, contributing to slumping sales.
To find success in the category, J.D. Power’s Karwel said, automakers are already adjusting how they market minivans, positioning them as a premium option similar to pickups or SUVs.
“They want to utilize some of that strategy with minivans — load them with tech and features, raise the price and make it a more profitable business model,” he said.
Costlier hybrids are another avenue.
Stellantis launched the Pacifica plug-in hybrid for the 2017 model year, while the Toyota Sienna is available only as a hybrid for the 2021 model year. The automaker is finding early success with its hybrid shift, Krebs said. In Canada, for example, Sienna sales rose to 10,363 during the first 10 months of this year, up from 6,535 in 2020.
The hybrid Pacifica has been a major draw at Langley Chrysler, Wiseman said, especially when factoring in federal and provincial rebates. With the current momentum for electric vehicles, whichever automaker goes fully electric in minivans first will secure a new set of buyers, he predicts.
“That’s going to be a game-changer for whoever gets there with that full electric option and where that takes them next,” he said.
With files from Greg Layson.