Flybrian

Lutz Responds to GM Minivan Debacle

98 posts in this topic

December 07, 2006

Whither the Minivan?

By Bob Lutz

GM Vice Chairman

Lots of minivan talk going on… let me just make one thing clear: Nobody said GM is getting out of the minivan business forever. We simply pulled a minivan option out of the running for one of our archtectures. We reserve the right to initiate whatever future product programs we feel the market desires, up to and including new generations of minivans if we deem them necessary and desirable.

That’s really the key to everything, of course: the market. And we think the case for another new entry at this point in a market is trending away from minivans just doesn't make a lot of sense.

Look, the minivan was a great idea, and a fine product. It pulled Chrysler out of the frying pan during some desperate times. But obviously in recent years a stigma has attached itself to the minivan and won’t let go. Same thing happened to station wagons in this country before the minivan came along.

And beyond that stigma, the minivan is hurt by the many other choices available to customers. SUVs have been conquesting minivan sales for years, and now crossovers will take even more.

Our new trio of crossover utilities — the GMC Acadia, Saturn Outlook and Buick Enclave — should not be compared to minivans; they are a totally different animal. But do we expect them to take sales from minivans? Absolutely. Just like we expect them to take sales from traditional SUVs.

These vehicles can carry eight people comfortably, have plenty of hauling space, and have a fuel-efficient 275-hp V6. And they have better road manners and vehicle dynamics than any minivan I’ve ever driven. Not that I’m comparing. But if I were, I know what would win!

These three crossovers will do nicely in the market for us, I believe, and, for now, we don’t see the need to offer minivans any longer, for many reasons. Do you?

Posted by Lutz on December 7, 2006 04:13 PM

-----------------

C&Gers, make your voices heard by responding on the FastLane blogs:

Wither the Minivan?

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eggs many.

baskets, one.

nice arguments, but look at how many odysseys and siennas and caravans sell.

this is likely more to do with not having $$$$$ to develop the model than WANTING to exit the market, I suspect.

I guess Lutz' wife never had a van with power sliding doors and hatch. That first time a new mom works that keyfob on a rainy day and not have to to touch the hatch or doors.......he probably never had kids in daycare either....LOL

I still think it wouldn't be hard for GM to sell 100,000 vans a year. If it were competitive.

We'll chase 30,000 kappas a year but can't make a case for a proven people hauler......

Edited by regfootball

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eggs many.

baskets, one.

nice arguments, but look at how many odysseys and siennas and caravans sell.

this is likely more to do with not having $$$$$ to develop the model than WANTING to exit the market, I suspect.

I guess Lutz' wife never had a van with power sliding doors and hatch.  That first time a new mom works that keyfob on a rainy day and not have to to touch the hatch or doors.......he probably never had kids in daycare either....LOL

I still think it wouldn't be hard for GM to sell 100,000 vans a year.  If it were competitive.

We'll chase 30,000 kappas a year but can't make a case for a proven people hauler......

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I think he made a reasonable case. There are only so many dollars to develop products. He is basically saying there are top quality products on the market today in the Siennas and Odysseys so putting new money into an already covered segment doesn't make sense when there are new segments where there is market opportunity so why not invest in those and have a better opportunity to make the money back.

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Uncle Bob always reads my mind. :AH-HA_wink:

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So by Bob's logic, Toyota shouldn't waste its time and money on the Tundra, since the Big 3 have the segment covered???? Get real. I guess GM should give up on the Camaro too, Ford's got it covered. Give up on the Malibu too, Toyota's got it covered.

GM execs are afraid that they don't have the engineering chops to develop a competitive minivan, to they gave up. How hard is it to develop a box on wheels? Even Hyundai figured it out.

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So by Bob's logic, Toyota shouldn't waste its time and money on the Tundra, since the Big 3 have the segment covered???? Get real. I guess GM should give up on the Camaro too, Ford's got it covered. Give up on the Malibu too, Toyota's got it covered.

GM execs are afraid that they don't have the engineering chops to develop a competitive minivan, to they gave up. How hard is it to develop a box on wheels? Even Hyundai figured it out.

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"don't have the engineering chops....?" It's time for YOU to get real. Any company that can build a Z06 for the price they sell for can build anything.

Obviously you didn't understand the point of the article. The mini-van is a declining market so why chase a declining market when there are growth segments to pursue?

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So by Bob's logic, Toyota shouldn't waste its time and money on the Tundra, since the Big 3 have the segment covered???? Get real. I guess GM should give up on the Camaro too, Ford's got it covered. Give up on the Malibu too, Toyota's got it covered.

GM execs are afraid that they don't have the engineering chops to develop a competitive minivan, to they gave up. How hard is it to develop a box on wheels? Even Hyundai figured it out.

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I totally agree

anyway if they really are so hard up for cash why not just import this :

Sure it's based on the old Venture, but it's a nice evolution. and future development of it will probably be paid for by profits generated within China.

So then you have

Aveo, Astra, RWD Pontiac and a minivan as imported niche products

post-577-1165583088_thumb.jpg

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Lots of minivan talk going on… let me just make one thing clear: Nobody said GM is getting out of the minivan business forever. We simply pulled a minivan option out of the running for one of our archtectures.

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This means they're evaluating other options.

These three crossovers will do nicely in the market for us, I believe, and, for now, we don’t see the need to offer minivans any longer, for many reasons. Do you?

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This means they're pulling out of the minivan market for an indefinite period of time.

Perhaps importing a future minivan from GMDAT and/or Europe is something that is under evaluation. An EpsilonII-derived S-Max competitor could find volume in Opel plus Saturn iterations, and some GMDAT thing could be marketed as a global Chevrolet.

Or maybe they are throwing the towel.

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So by Bob's logic, Toyota shouldn't waste its time and money on the Tundra, since the Big 3 have the segment covered???? Get real. I guess GM should give up on the Camaro too, Ford's got it covered. Give up on the Malibu too, Toyota's got it covered.

the difference is, right now Toyota has goodwill in the market (desereved or not), while GM doesn't

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It would be one thing if GM was making minivans like Chrysler, but does anyone really miss the dustbusters? Will anyone really miss the current U-boats?

Lutz is right, there is little to no room left for mini-van growth. They have the same stigma as wagons did in 1992.

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It would be one thing if GM was making minivans like Chrysler, but does anyone really miss the dustbusters? Will anyone really miss the current U-boats?

Lutz is right, there is little to no room left for mini-van growth. They have the same stigma as wagons did in 1992.

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Amen

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More to the point, it's DCX that should be worried about minivans. Sure they make the top seller, but that also means they have the furthest to fall. They need to have an alternative in place to have a nice soft landing.

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It's not a new occurance that the minivan segment has been cooling off for a while and the companies that don't have competitive vans and aren't doing so hot right now (GM and Ford) are looking at priority segments that they need to devote money to in order to make profits. Crossovers and mid-size sedans. It's a wise decision on both companies to drop out. When the segment picks up again, they have the platforms to do it.. so it's not like they won't be completely unprepared.

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GM's problem is going to be marketing the Lambdas to people who insist they need a minivan. They fell flat on their face trying to convince people that the Colorado's I5 was every bit as good as a V6. In this era of $3/gal. gas, SUV-like vehicles have as much of a stigma as the minivan or the station wagon. The Lambdas look like great vehicles, but I think they'll be a hard sell to minivan buyers.

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GM's problem is going to be marketing the Lambdas to people who insist they need a minivan. They fell flat on their face trying to convince people that the Colorado's I5 was every bit as good as a V6. In this era of $3/gal. gas, SUV-like vehicles have as much of a stigma as the minivan or the station wagon. The Lambdas look like great vehicles, but I think they'll be a hard sell to minivan buyers.

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Hat to say it, but while over all you are right on the stigma's. Question to ask is do we need the cheap Minivan Buyers?

Most minivan buyers maker less than 45,000 a year and while DCX has the bulk of the segment, that segment excluding the over priced Honda van that goes to higher income families. DCX sells the bulk of their minivans in the low end category.

I agreee with Lut'z. In brining GM back to a profitable growing company. do not waste R&D dollars on this segment. Focus on the growing segments.

Crossovers and Sedans along with the new GMT900 platform for the markets. After all, China is a growing hotbed, might as well get the products that are selling like hotcakes in there also. I think Lutz is spot on this time about minivans.

Also like someone else mentioned. How many people on this site really drive a minivan. I myself will never own a van or minivan. Do not like the layouts or designs, etc. I for one will stick to my Suburban and CTS. 8)

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I drove a Venture for a while until I SmartBought the Cobalt. Now my mother in-law drives it. While it isn't very competitive, it adheres to the initial minivan concept. It's has people- and cargo-moving capabilities like a passenger van, but drives more like a car. Minivans were crossovers before manufacturers started building CUVs.

What I think GM should do is take the unique traits of minivans and try to apply them to crossovers. Not to build a complete minivan replacement, but something that would get customers to think twice about buying a minivan.

Sliding doors are underused in a society where some people don't think twice about slamming their door into the adjacent car (of which my car has already been a victim... numerous times <_<). Removable or flat-folding seats greatly increase cargo capacity, and I'm glad to see them in the Lambdas. Higher rooflines in general allow for more cargo capacity.

Customers still have to make a compromise between style and utility, and it will always be that way until boxes become en vogue. The Lambdas look great, but unless they raise the roof about 10 inches, add sliding doors, and shave $5,000 off the sticker, they will never properly replace the minivan.

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They fell flat on their face trying to convince people that the Colorado's I5 was every bit as good as a V6.

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The I5 is every bit as good as a V6.... it is the rest of the truck that lost the sale.

There are those who agree with the stigma of a minivan and don't want one yet still need the utility. Those same people also have heart failure when they see the EPA sticker on a Tahoe or Suburban. These people are willing to pay Tahoe/Suburban money for a people hauler, but don't want the look/stigma of a minivan or the gas mileage of an SUV. These are the people GM is targeting with the Lambda. The Outlook bases around 28k, a much higher transaction price than a 19k Lumi^h^h^hVent^h^h^hUplander. GM has effectively moved into a more upscale market. Why all the hubub?!

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From the Autoweek review:

Not only is it easy to get into, we’d gladly ride in that third row all day—if we wanted to watch a DVD on the optional entertainment system, the third row might be our first choice. Little wonder that GM is having second thoughts about its plan to derive a minivan from this platform—sliding doors would not improve access to the third row by much, unless you made the minivan bigger still.

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GM can market the Lambdas to minivan buyers:

"The look of an SUV, the ride of a car, and the functionality of a minivan allow for great looks, great handling, and superb entry-and-egress."

If an engineering major can come up with something like that of the top of his head, I'm sure the marketing folks can do something thoroughly convincing.

Plus, how many people would really rather have a crossover than a minivan? How many people buy minivans because the entry/egress isn't as easy in SUVs/crossovers? If the Lambdas are as functional as minivans, I see no reason why they won't steal sales.

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From the Autoweek review:

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Spoken like true simpletons.

First, off the minivan market is still huge, contributing to over 1,000,000 sales a year.

Second, the sliding doors are the most import difference between a van and traditional 4 door wagon.

Why you might ask? Simple, try loading children and child safety seats in a tight parking space with a vehicle that has traditional opening doors compared with the minivan sliding doors. Access might be easy in the lambdas with the big doors, but that alone because of the size and geometry of the doors makes it more difficult when you are parked next to someone at the mall.

Sorry, minivans have a stigma but they are more functional for a mom loading her family when it comes time to run errands.

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There are two sides to this argument and they have already been aired in this thread. For now, it is best GM focus 100% on the segments that matter, segments that have tons of sales and make money. Once GM is in the clear it can focus on building a good traditional minivan.

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I'd be curious to know how much it would really cost to engineer a Minivan off of the Lambda platform. This is one case where that sort of badge engineering would not be so bad, because, rather than starting off with a mediocre product and cloning it (like in the case of the TrailBlazer - 9-7X), they would be starting off with an excellent product and tailoring it to meet the needs of a specific customer. That is what smart companies do. Honda, for example, has done it in reverse, engineering the Pilot off of the Odyssey's platform, then evolving the Ridgeline even further off that same design.

I also think there is a huge potential market for MPV-type vehicles in the States, like the Mazda5. They are perfect for budget-minded Minivan buyers, new families, or people who just need a little extra space from time to time but don't want to sacrifice car-like ride, handling & fuel economy. I'm sure that GM has some sort of MPV in the European market, they are huge over there. So, I ask again: How hard would it be to bring that over here and slap a Saturn badge on it? And, furthermore, would it be so much to ask for GM not to be late to a new vehicle segment for once? Introducing an MPV into the American market would pretty much make them a segment leader right now.

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Spoken like true simpletons.

First, off the minivan market is still huge, contributing to over 1,000,000 sales a year.

Second, the sliding doors are the most import difference between a van and traditional 4 door wagon.

Why you might ask?  Simple, try loading children and child safety seats in a tight parking space with a vehicle that has traditional opening doors compared with the minivan sliding doors.  Access might be easy in the lambdas with the big doors, but that alone because of the size and geometry of the doors makes it more difficult when you are parked next to someone at the mall.

Sorry, minivans have a stigma but they are more functional for a mom loading her family when it comes time to run errands.

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don't forget about dads! we drive them too.

If Hyundai can come to market with 2 competitive minivans(Sedona/Entourage) then sure as hell GM can figure out a way to do the same.

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don't forget about dads!  we drive them too.

If Hyundai can come to market with 2 competitive minivans(Sedona/Entourage) then sure as hell GM can figure out a way to do the same.

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They came to market with one competitive minivan. The Sedona/Entourage are just as much a badge job as the GM vans.

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