A newly formed alliance linking General Motors Corp. with two dozen conversion van outfitters is banking that a new image will rejuvenate the shrinking marketplace.
According to an Associated Press report, GM helped form the Conversion Van Marketing Association (CVMA) this year and is spending a couple of million bucks to raise awareness of customized vans – the Chevrolet Express and GMC Savana in particular – and to dispel perceptions of rough-riding vehicles decked out with wild paint jobs and crushed velour upholstery.
Today’s vans, which typically cost less than a loaded full-size SUV, feature leather seating, central air conditioning, home theater-quality sound and flat-panel televisions.
GM’s investment in the effort underscores the ultra-competitive nature of the U.S. vehicle market, where the world’s largest automaker can’t afford to cede one iota of business. It’s no surprise that GM’s chief competitor is cross-town rival and No. 2 U.S. automaker Ford Motor Co.
“With the proliferation of vehicles over time – SUVs, crossovers, etc. – this is one more niche vehicle we can offer the consumer,” said Ross Hendrix, GM’s marketing director for commercial vans. “We see an opportunity and we’re pursuing it.”
Conversion van sales peaked in the early 1990s but have fallen steadily over the past 10 years because of the popularity of hulking SUVs. Sales totaled roughly 181,000 in 1994, fell to 76,000 in 2000 and dropped even further to 38,000 in 2003, when Dodge ended production of its full-size Ram vans, according to Conversion Van Marketing Association figures.
Through November 2004, van conversion shipments were down 30% to 25,400 units compared to 2003, according to figures from Recreation Vehicle Industry Association.
That basically limits the choices to the two GM models and Ford’s E-Series model. Virtually every major automaker, in contrast, sells some type of SUV.
The CVMA is composed of 24 manufacturers who buy the vans from GM, outfit them with premium paint, electronics and customized interiors and sell them to GM dealers for sale to consumers. About 800 of GM’s 7,400 dealers sell conversion vans, according to the CVMA, which would like to increase that number as well.
The CVMA’s goal is to boost sales of GM vans by 25 percent in the next two years by raising awareness through a website, direct mail and other avenues, said association president Rod McSweeney, owner of Southern Comfort Conversions Inc. in Trussville, Ala.
The timing for the push is ideal, McSweeney said, because of the metamorphosis of the vans over the past several years. After upgrading the chassis in 1996, giving it a smoother ride, GM enhanced the styling and added an all-wheel-drive option in 2003, making the vans more feasible for those in colder, icy climates.
GM contributed $2.1 million to the marketing effort, which McSweeney said will target outdoor enthusiasts, college alumni groups with a penchant for tailgating and others who might be ready to trade their SUV for a premium van, which can seat up to nine. CVMA are showcasing the vans this week at the North American International Auto Show in Detroit.
McSweeney and other converters say one of their biggest selling points is price. A conversion van, they say, can cost several thousand dollars less than a full-size Chevrolet Tahoe or Ford Excursion SUV, whose prices can climb to $45,000 or higher.
“The thing we’ve lacked the most is basic awareness,” said Joe Smucker, whose company, Santa Fe Vans in Elkhart, Ind., ships converted vans to dealers in 48 states.
Ford said it also works with its dealers and outfitters to promote the conversion van business, but it has no plans for a CVMA-style effort. One ongoing initiative is a 310,000-piece direct-mail campaign that includes a $500 “gift card” for a van purchase.
Art Spinella, president of CNW Marketing Research in Bandon, Ore., said an effective campaign by the CVMA could provide a nice lift to GM’s business now and in the future. His research shows the vans’ refinements have created one of the most loyal buyer segments in the industry.
“What we find, for the most part, is they’re considered a lot more comfortable than minivans and certainly roomier than sport utility vehicles,” Spinella said. “Seventy percent of owners say they’ll buy another, and 90 percent will recommend them to friends.”