CEDAR RAPIDS, Iowa - The new model year had not even begun when DaimlerChrysler in August placed incentives on its 2000 Chrysler, Dodge and Plymouth minivans.
Two increases quickly followed. DaimlerChrysler now offers a cash rebate of $1,250 on all 2000 model minivans.
'That should be enough' to maintain a 40 percent share of the minivan market for the year, said Jim Holden, president of DaimlerChrysler's North American operations.
The automaker put on an upbeat face here Nov. 24 as it presented a new Dodge Grand Caravan ES to Chuck Fulton, a retired paper salesman and loyal Dodge minivan buyer. The gift marked a company milestone: its 8 millionth minivan to be delivered.
DaimlerChrysler's share of the 1.2-million-unit minivan market is eroding, and its redesigned minivans are not due until next summer or fall. Resorting so quickly to incentives is a recognition of the growing challenge from competitors.
Holden said he is not worried about market share. 'Swings of 1 to 2 points are not dramatic,' he said.
DaimlerChrysler still owns the low and high ends of the minivan market, Holden said. The automaker has a 60 percent share of the market in minivans priced under $20,000, and 50 percent over $30,000, he said.
'The war is in the middle,' where minivans are priced from $20,000 to $30,000, Holden said. DaimlerChrysler's slice of that middle ground is about 33 percent, he said.
Redesigned models, such as the Honda Odyssey and Toyota Sienna, are taking a toll on DaimlerChrysler's minivan domination. So is the age of its existing lineup. The minivans were last redesigned for the 1996 model year.
The existing NS platform will be replaced by the next-generation RS platform for the 2001 model year. When they go on sale in mid-2000, no competitor will be vying for attention with another redesigned minivan.
'It's a pretty good window to arrive in,' Holden said.
DaimlerChrysler's share of the minivan market through October was 37.8 percent, down from 43.1 percent during the same 10-month period in 1998. Its share in October was 34.2 percent.
Both the Toyota and Honda minivans have been popular. With sales of 82,441 during the first 10 months of this year, the Toyota Sienna captured 7.3 percent of the market, up from 6.5 percent during the same period a year ago.
HIS FOURTH DODGE
Fulton, 69, cares little about market share. The free minivan from DaimlerChrysler marks his fourth Dodge minivan.
On Nov. 14, 1983, Fulton spotted a car hauler carrying a minivan on I-80 near his home in Cedar Rapids. He followed the truck to a local dealership, test drove the minivan and bought it.
'I would have followed it to Minneapolis,' Fulton said.
Holden knows how critical the redesigned 2001 minivans will be in order to retain loyal customers like Fulton. He would not offer any details on the new minivans, but said they would represent a significant stride forward.
Said Holden: 'Anytime you do an all-new program, that's the objective, to set them apart from the current generation.'