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The Honolulu Advertiser
Posted on: Wednesday, January 2, 2008

Minivans give way to crossovers

By Sharon Silke Carty
USA Today

Hawaii news photo - The Honolulu Advertiser

Minivans such as this 2008 Dodge Grand Caravan are being overtaken by crossovers, which are built on a car chassis and have better fuel economy.

ASSOCIATED PRESS FILE PHOTO | July 2007

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DETROIT � Minivans are quickly fading into the background as buyers flee the segment in favor of something cooler: crossovers.

The minivan market missed the 1 million mark for sales for the first time in 13 years in 2006. This year, sales have practically fallen off a cliff. Sales may not even hit 800,000 by year's end.

"There will always be a core market for minivans, and buyers who appreciate the pure functionality and advantages those vans provide, so I don't think you'll ever see that go away," said Karl Brauer of Edmunds.com. "But there are enough alternatives to minivans that appeal to people who don't like the minivan stigma, and that's why you're seeing this drop-off."

Overall vehicle sales are down this year, so many segments are posting fewer sales than last year. But minivans have had even bigger declines than large and midsize SUVs. Through the end of November, the minivan market was down 19.5 percent, while large SUVs were down less than 1 percent and midsize SUVs were down 12.7 percent.

Minivans now account for 4 percent of the overall market, down from 7 percent in 2004, according to Power Information Network.

"It's under extreme pressure from crossovers," said Tom Libby, senior director of industry analysis for PIN. Crossovers have SUV convenience but are built on a car chassis, which provides a smoother ride and better fuel economy.

"The manufacturers are flooding the market with crossovers. You get a combination of what people perceive to be a better actual product without any stigma attached," Libby said.

Ford has stopped making its Ford Freestar minivan, and General Motors is phasing vans out of its lineup. Meantime, both are pushing crossovers, including Ford Edge, GMC Acadia, Buick Enclave and Saturn Outlook.

The market "has been assaulted by crossovers," said Jack Nerad of Kelley Blue Book's kbb.com. As more crossovers enter the market, it bolsters the perception that minivans "are fairly mundane. They don't have a lot of verve."

High gas prices and the downturn in the housing market may also be affecting minivan buyers more than other car buyers, industry watchers say.

"The minivan market is fueled by people who are good, working-class people," said Nerad. "If you feel like your home equity is plunging, and if you're on some kind of adjustable-rate home mortgage and it's costing more, you're getting squeezed in a bunch of different ways. Buying that brand-new $40,000 minivan may not make a lot of sense."

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