Carmakers betting on mini minivan

The iconic minivan, under siege in recent years, is facing a new challenge — the mini minivan.

Mazda and Kia are starting to make their mark in the market with mini minivans, or compact multi-purpose vehicles, and that's attracting the interest of several rivals.

General Motors and Ford are planning models in 2011 while Honda and Toyota could introduce its current people haulers in Japan to the North American market, according to industry watchers.

There are even rumblings that Chrysler, inventor of the original minivan in 1983 and perennial market leader, may build a smaller model with help from its new Italian partner Fiat SpA.

"Everyone wants to get in now," said John Wolkonowicz, a senior auto analyst at U.S.-based IHS Global Insight. "We think that, with aggressive styling and the right chassis, it will be the kid hauler for Generation Y."

Industry research shows a significant percentage of the next generation of families are leaning to people haulers that emphasize fuel efficiency, flexibility, unique styling and lower sticker prices.

Those consumers are shying away more from big, gas-guzzling minivans with loads of creature comforts and high prices.

"It's the right concept (mini minivans) but the stylings are still far too tame," said Wolkonowicz. "One of the reasons minivans are tailing off is they are so unstylish and they scream `mommy mobile.' "

Sport utility vehicles started cutting into the minivan's big and lucrative end of the market early this decade. Then, crossover vehicles moved in and pulled business away from minivans and sport utes.

Mazda introduced the Mazda5 in 2005 as a replacement for its MPV model. Kia followed with the Rondo the next year.

Sales for the Mazda5, which includes sliding doors and a peppier engine, climbed steadily in Canada to almost 12,000 in 2008 before tailing off this year with the overall industry slump and lack of supply. But company spokesperson Greg Young said Mazda has high hopes.

"We consider this (model) one of our pillars," Young added. "There is huge potential. This is the right time. People want a compact size vehicle that is fuel efficient and comfortably holds six people or lots of storage space. It's perfect for young people with families."

The length of the Mazda5 is 461.01 cm, and much shorter than the current market leader, the Chrysler Dodge Grand Caravan, which spans 514.35 cm. The Mazda5 is also significantly lower and narrower than the Dodge model.

The original Chrysler minivan also was much smaller than the current model and even the Mazda5. It stretched 446.7 cm.

Sales of Kia's Rondo have climbed steadily since it arrived in 2006. They could top 10,000 and surpass the Mazda5 this year.

Ford is planning to introduce the C-Max in North America in 2011 and GM wants to start selling the Chevrolet Orlando the same year. Toyota could offer the Wish model at the same time while Honda may enter the Stream vehicle in the Canadian market next year.

There is widespread talk in Windsor that Chrysler will start building a mini minivan at the company's sprawling assembly complex in the city during the next few years. That plant already builds the Dodge Caravan and Chrysler Town & Country minivans and the smaller Routan model for Volkswagen.

Chrysler and Fiat have declined to comment on the prospect of producing a mini minivan in Windsor.

Chrysler currently controls about 49 per cent of the minivan market in Canada after several rivals exited the market, reflecting the business lost to sport utes and crossovers.

Analyst Dennis DesRosiers said annual minivan sales have plunged from about 228,000 vehicles in 1998 to 101,000 last year, or more than half in a decade, as sport utes and crossovers pulled motorists away. "This new segment (mini minivans) could be getting a bigger piece of a smaller pie," he said.

IHS Global Insight is forecasting sales will more than double the current level of about 21,000 in Canada this year to almost 50,000 in 2014, or about 3 per cent of the overall light vehicle market. In the U.S., where Americans traditionally prefer bigger vehicles, Global Insight is forecasting mini minivans sales will climb from about 34,000 this year to more than 276,000 in 2014.

"Unless Americans embrace them, it will be a difficult thing (segment) to develop," DesRosiers said.