About six years ago, Sands Chevrolet took a hard look at its van-conversion business, a vehicle segment that generated a few monthly sales but clearly remained a sideline.
It became clear to the Glendale, Ariz., dealership what had to be done: Treat van conversions with the same level of attention as it devoted to cars and light trucks. Or don't bother.
'We just made up our mind to get in the business, and once we got in, we wanted to dominate it,' said Jerry Moore, general manager. 'You're not halfway into the van business.'
In 1995, Sands sold more than 1,000 conversion vans in its Phoenix-area market. This year, with the industry on the decline for the fifth straight year, Sands expects to sell 500 to 600 full-sized van and minivan conversions. Sales have been soft in the last two quarters, but the dealership hasn't pulled back from its commitment to conversion vans.
NARROWING SUPPLY BASE
Moore follows a simple strategy. He stocks 100 to 150 conversion vehicles on his lot. Rather than dealing with six or eight converters, he narrows his supply base to only three companies.
Sales training has been beefed up. And customers can choose from a range of models, from an entry-level base model to loaded high-line vans.
'We treat van conversions like a passenger car,' Moore said. 'We cover the market from top to bottom.'
Last year, U.S. van conversion registrations totaled 93,463 units, down 38.5 percent from a recent peak of 151,879 vehicles in 1993. The market has been hit hard by the surging popularity of sport-utilities, which have crowded conversion vans out of many dealer lots.
In a shrinking industry, automakers are reducing the number of authorized upfitters by raising quality standards and engineering requirements. Converters that don't make the grade don't get vans from the factory. Chevrolet, for example, has about 75 approved converters in its program, down from 103 two years ago.
Automakers are also pushing dealers who sell conversion vans to reduce their supply base. In the past, many dealers shopped vans aggressively on price from six or more converters. Dealers, automakers say, are better off handling vans from no more than two or three converters and building long-term relationships. That, in theory, will generate better warranty service and more customer satisfaction.
'When you're buying on price, that's all you're buying,' said Jim Brieske, manager of RV sales at Chevrolet. 'And the upfitters have to make money, too.'
In turn, more converters are focusing on one or two makes. That allows them to simplify production systems and forge closer relationships with dealers. Of the top six converters on Ford Motor Co.'s 1997 best-quality list, five deal with Ford exclusively.
'If you're only working on one brand, then you'll really be able to take care of your dealer,' said Jerry Mittman, recreation and specialty vehicles sales manager at Ford.
Alone among the Big 3, Dodge gained market share in 1997 in the full-sized conversion market, according to data from Polk, a market research firm in Southfield, Mich. Dodge had 26.6 percent of the market last year, up 4.2 percentage points. Chevrolet (31.3 percent), Ford (29.5 percent) and GMC (12.7 percent) all lost share.
Ford and General Motors redesigned vans earlier this decade. The Dodge van, which got a mild freshening for the 1998 model year, is the same basic vehicle Chrysler introduced in 1971.
Dodge, without new investments to recoup, has been able to position itself as an entry-level conversion vehicle and gain market share.
Dodge has also worked on making vans destined for converters easier to upfit, said Jack Warren, manager of van marketing plans at Dodge.
'What we're trying to do is lower the cost of conversion and improve the quality at the same time,' he said.
Automakers, for their part, are focusing van conversion advertising on the interior of the vehicle. They are trying to show how the conversion van, with its roominess and comfort, works especially well for families.
The van conversion market, although down, still holds a lot of appeal for some consumers, said Larry Walp, special vehicle sales manager at Pontiac-GMC. But automakers, converters and dealers will have to work harder in the future to be successful in the van conversion business.
Said Walp: 'It doesn't sell itself anymore.'