What Do Moms Want? GM's Minivan Issue

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General Motors confirmed Nov. 22 that it's getting out of the minivan business to concentrate on crossover SUVs. But the market for the two isn't necessarily the same. The problem is that, like Ford (F) -- which announced it was ceasing production of minivans in September -- GM (GM) just couldn't compete with better products from Toyota (TM), Honda (HMC), and Chrysler. So rather than trying to fix the problem, they're getting out entirely.



Yet four years ago, GM seemed determined to recapture its fair share of the minivan market that the company had originally chased starting in 1990 with a critically lampooned trio of offerings -- dubbed "dustbusters" because of their long point hoods -- the Chevy Venture, Oldsmobile Silhouette, and Pontiac Montana. In the spring of 2002 at New York's posh Le Cirque restaurant, GM Vice-Chairman and product development boss Robert Lutz grabbed hold of my reporter's notebook and began sketching GM's next minivan.



Lutz, who knows something about minivans, having been at Chrysler in the 1980s when that company created the segment as we know it today, drew a conventional-looking minivan, and then with his Parker pen redrew the line of the hood to be longer and beefier, like an SUV. He then redrew the C-pillar [the center pillar] and B-pillar [the pillar closest to the third-row seat in the rear] to also mimic those of an SUV.



Minivan Mulligan

The result of these sketches were the Saturn Relay, Chevy Uplander, Pontiac Montana, and Buick Terraza. Lutz's notion was that soccer Moms didn't want the van design any more, and that the new SUV-ish design would knock down some of the objection men have to driving a minivan.



It looked better in my notebook than it did in sheet metal. On the market for less than four years, the minivans are going away because they were executed badly, and paled in comparison to offerings from the Asian automakers and Chrysler. And GM, as it stops producing the last of Lutz's minivans, is rethinking whether it wants to be in this market at all.



"The minivan market has become stratified, with Toyota and Honda at the upper end, and now Chrysler, Hyundai, and Kia at the lower end," says GM's sales & marketing chief Mark LaNeve. "We don't think there's a lot of money to be made there."



Lutz can be given something of a mulligan on his minivans. He didn't start with a clean sheet of paper. GM took the old uncompetitive minivans it had and spent just a few hundred million dollars re-skinning them with the SUV-ish looks, cleaning up the front-seat interiors, and creating a makeshift arrangement in the rear to serve as a flat-loading service when the second and third rows of seats are folded flat.



New Hope?

It wasn't so much that the GM minivans have been awful but that they haven't been competitive with the Honda Odyssey, Toyota Sienna, and Chrysler Town & Country. Those three models are the first three choices for most minivan shoppers because of their superior packaging and their makers' reputation for producing the best minivans. Ever since the "dustbuster" debacle, the biggest auto maker in the world has had a lousy reputation in minivans, with a huge number of the Lutz vans built in the last several years sold to employees and GM "friends and family" just on price.



The rationale for getting out of the minivan business at GM is the arrival of the companies' full-sized crossover vehicles over the next several months. These SUVs, code-named "Lambda," include the Saturn Outlook, GMC Acadia, and Buick Enclave. They have three rows of seats, but no sliding door. The second row of seats have a very slick folding mechanism that makes the egress to the third row very easy -- best in class.



Out of this trio, I have only driven the Outlook. And detailed driving impressions are embargoed until early December. But what I can say, as the current owner of a Honda Odyssey and father of a young son with classmates that need ferrying about, is that this SUV takes a backseat to none of the Asian minivans or SUVs. It's GM's best work to date in the crossover and minivan segments, and is worthy of benchmarking by other auto makers, including the Japanese.



Open Options

As good as GM's new full-size crossovers are as substitutes for minivans, there's only one shortcoming that's still giving GM executives pause about abandoning the segment altogether. Getting kids in and out of a minivan or crossover is frequently done in a parking lot. And as big as the GM Lambda SUVs are -- and they are big -- they will undoubtedly cramp most grocery store and Chuck E. Cheese's parking spaces.



That means Moms and Dads could struggle to get kids in and out through a hinged door, especially if the SUV is sandwiched between two other SUVs. For all the knocks on minivans, sliding doors are great in parking lots. Just ask the Japanese. In Japan, lots of cars have sliding doors because of the smallness of parking spaces. It's a good idea.



LaNeve says GM is still dithering over whether Chevy, for example, should have a sliding-door SUV as an option. Normally, offering both a hinged door and a sliding door would be an expensive proposition. But GM already had a design for a Lambda minivan with sliding doors that some reporters have seen. It's possible that GM could make a sound business case to ensure there's enough flexibility in its factory to produce both.



Mom Makeover

Industry consultant Jim Hall of AutoPacific says "the Lambda vehicle architecture lends itself to a lot of variants, and the fact that they already engineered it for a sliding door means they could do it affordably if they think enough customers want it." He says that after the Saturn, GMC, and Buick SUVs are in the market, GM will know from consumer feedback if the lack of a sliding door is big minus in the showroom.



Minivans have served, and will continue to serve, a great role in American car culture. But both Ford and GM executives complain that it's a declining category. Minivans peaked at 1.37 million units a year in 2000, and that number fell to 1.1 million last year. This year, the real demand for minivans is under 900,000 when you subtract the units Ford and GM have been selling to rental fleets to get rid of unsold inventory.



What worries auto makers is that Moms who are more likely to have just one or two kids, instead of four, would rather have a sportier, less "Mom-ish" vehicle. I'm sure many would. But the minivan has been and continues to be a great package. Besides being ideal for hauling kids, and loading and unloading them into and out of car seats, they're handy for transporting elderly grandparents with walkers or transport chairs. They're also the next best thing to a pickup truck for trips to Lowes (LOW) and Home Depot (HD).



Innovation Pays

GM's three full-sized SUVs address all of these issues. The floor height was similar to a minivan, so it wasn't a troublesome climb into the driver's seat. The rear loading room was fine and useful. The egress for a car seat wasn't as good as a minivan, but better than any other full-size SUV I have driven. But a sliding door version makes a lot of sense. On top of that, the interior details of the Outlook are as well turned out and conceived as any vehicle I have ever driven.



I have always found the declining minivan category to be a self-fulfilled prophecy on the part of GM and Ford. Both companies never sent competitive minivans to the market. The Ford Windstar and the current Freestar, as well as the GM minivans, have long been floaty-riding vehicles with soft suspensions and dowdy styling. GM has barely 15% of the minivan market, and most of that is achieved through heavy discounting and fleet sales.



Toyota, Honda, and Chrysler, which is a division of DaimlerChrysler (DCX), have continued to innovate in the segment, and it has paid off. It's one of the main segments the Japanese have used to siphon sales from GM and Ford. Honda had the first fold-away third seat. Toyota pioneered second-row windows that rolled down. Both have car-like smooth and solid rides.



Chrysler, the inventor of the modern minivan, spent between $500 million and $1 billion to create Stow-and-Go, which enables the second and third rows of seats to disappear into the floor. Kia has staked out the "value" end of the market with a competitive minivan, and Hyundai has just introduced a minivan, the Entourage.



Still Guessing

One of the principal reasons the segment has declined in recent years is that the two biggest auto makers in the industry, GM and Ford, have phoned their entries in, rather than using the minivan as a canvas for innovation. It has been remarkable to watch Ford, for the last decade, give up on the midsized family sedan and minivan, though it's trying to come back in the sedan market with the Fusion and Five Hundred.



Ford will try to fill the minivan segment it is abandoning with the Fairlane "people-mover" concept that has received positive reception at auto shows. Ford plans to introduce it in late 2008. That vehicle has gone back and forth between hinged doors and sliding doors in its development. It seems that GM and Ford haven't quite figured out what minivan buyers and would-be minivan buyers really want. That's a shame. They have had 20 years to figure it out. And the answers haven't eluded their Japanese and Korean competitors.