GM Sets Minivan Prices Significantly Higher than Ford and Chrysler Prices

09/23/96

Reuters has reported that General Motors has announced prices for its trio of new minivans. The prices start at $20,495 and have been set significantly higher than the prices for competing models from Chrysler and Ford.

The new models--Chevrolet's Venture, Pontiac's Trans Sport, and Oldsmobile's Silhouette--replace GM's slow-selling, plastic-bodied APV minivans. They are currently beginning to arrive at dealer showrooms.

The three-door, short-wheelbase Chevrolet Venture minivan claims the $20,495 price, while $26,805 will buy the largest, most luxurious Oldsmobile Silhouette. All of GM's announced prices include a $570 destination and delivery charge. Analysts had expected GM to undercut Ford's and Chrysler's pricing to establish itself as the value leader in minivans. 1997 Chrysler minivans start at $17,815; Ford repriced its 1997 Windstar van at $18,995.

Analysts said the pricing strategy makes it clear that GM doesn't plan to serve the low end of the minivan market. Wes Brown, an auto analyst for CSM Forecasting said, "This pricing is going to hurt them. We are going to have to lower our forecast for those vehicles and for their plant."

GM will building the vans (plus a European minivan, the Opel Sintra) at its assembly plant in Doraville, GA, which is capable of making about 240,000 vehicles annually.

GM's marketing chief, Ronald Zarrella, said, "you can't look at base prices. Nobody buys that. It's not meaningful." He said that in the mid-level and higher price ranges, the GM vans are competitive, and in some cases, cheaper than Chrysler's offerings.

Brown said the GM minivans improve on their long-snouted predecessors, but he doubts that consumers will be willing to pay premium prices for them. He said, "They don't break any ground and aren't as stylish as the Chrysler vans."

The GM vans offer a powerful standard 3.4-liter, 24-valve V-6 engine that produces 180 horsepower. A less powerfull V-6 engine powers Ford's cheapest minivan; Chrysler's runs on a four-cylinder.

Paul Dever -- The Auto Channel