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  1. Analysis
May 30, 2000

The reasons why full-size minivans don’t sell in Europe

Back in the early 1990s, Chrysler forecast a European full-size minivan (MPV) market in the region of a million units per annum. That forecast turned out to be wildly over-optimistic. What sells in the US doesn't necessarily work in Europe and vice versa. But it turned out that the minivan concept was relevant to the European marketplace - it just had to be adapted to suit European operating conditions.

By bcusack

Back in the early 1990s, Chrysler forecast a European full-size minivan (MPV) market in the region of a million units per annum. That forecast turned out to be wildly over-optimistic. What sells in the US doesn’t necessarily work in Europe and vice versa. But it turned out that the minivan concept was relevant to the European marketplace – it just had to be adapted to suit European operating conditions.

The US is the home of the light truck. Booming sales in recent years have reinforced that message. The sales volumes are huge and margins are large. For the big domestic suppliers, it’s been a godsend. Over half of light vehicle sales in the US are accounted for by light trucks – pick-ups, sport utility vehicles (SUVs) and minivans (also known as Multi-Purpose Vehicles – or MPVs). Ford, GM and Chrysler dominate the market. In spite of forecasts that the situation will reverse, the US consumers’ voracious appetite for light trucks shows no sign of weakening. The lifestyle connotations that ownership of these vehicles bestows strike a strong cord in the US – active not passive, outdoors, American and ‘individualistic’ (more a sense of not being a sedan (saloon) car driver than true individualism, as the numbers are so large).

Light truck opportunities outside America limited

The phenomenal growth of sales of these vehicles in the US has, naturally, led to manufacturers looking for similar sales in other regions of the world. Pick-ups have remained largely and stubbornly American in appeal. The second largest pick-up market in the world is that of Thailand, where pick-ups enjoy tax advantages versus cars – and the big sellers are Japanese designs. South Africa also has a sizeable market and there are markets in South America where their ruggedness appeals. But pick-ups have not enjoyed wide acceptance outside of America. In Europe, they constitute a very small niche accounted for by sales to a small number of builders, tradesmen, farmers and nurserymen. The private-use or leisure demand crossover has not materialised in spite of the valiant efforts of Skoda with its gaudy yellow Favorit-based ‘fun’ pick-up. On the other hand, SUVs have caught on in other parts of the world and have followed the US trend for a multitude of different sizes and specification levels. That said, extra large vehicles like the ironically named Chevy Suburban and Ford Excursion have limited appeal outside of the US. In the case of minivans, the appeal of mainstream US-sized vehicles outside of the US has proved limited.

Chrysler was first with a minivan product

It is widely acknowledged that Chrysler was the first manufacturer to launch a minivan (or Multi-Purpose Vehicle – MPV) back in 1982. The advent of minivans in the US partly stemmed from a need to breakout of the poor image that dogged sales of station wagons. In Europe, wagons have carried a less staid image – a tradition that continues to the present with the sports wagons produced by BMW, Mercedes-Benz and Audi. In the US, minivans were seen as new and a lot less narrowly defined in terms of market appeal – although still centrally aimed at family buyers and those requiring a significant utility application. Sales quickly grew, and other manufacturers entered the market segment to take sales to around the one million unit mark.

Elsewhere in the world too, other makers were looking at similar projects at the time, with Renault’s Espace launched in 1984. The Japanese followed, most notably with the Nissan Prairie, Mitsubishi Space Wagon and Toyota Space Cruiser. The latter was an adaptation of a panel van and a number of makers rushed out passenger-carrying versions of commercial (load-carrying) panel vans.

Rush to install minivan capacity in Europe

In the early 1990s, a number of manufacturers looked at the European car market and saw a major opportunity for increased minivan sales. All through the 1980s, the European minivan market was dominated by the Renault Espace and a clutch of Japanese importers. Surely, the argument went, when more mainstream makers introduce these models they will catch on in much the same way as they had done in the US. At the time, Chrysler was talking in terms of a market for minivans in Europe of 1 million units. On the supply-side, a number of projects were planned with the specific aim of producing product for this untapped minivan segment.

A number of the projects were joint ventures. Ford and Volkswagen worked together at the AutoEuropa facility at Setubal in Portugal – which makes the Ford Galaxy, Volkswagen Sharan and Seat Alhambra. PSA (Peugeot-Citroen) got together with Fiat to make an MPV version of a commercial van under the Sevel accord at Valenciennes, France. The resultant output is sold under the Fiat, Lancia, Citroen and Peugeot brands. Mercedes opted to make a luxury minivan at its Vitoria, Spain, plant (again, making an MPV alongside a commercial van variant). Chrysler added the Voyager to its Graz, Austria, vehicle-making activity (the Grand Cherokee was already made there). GM was more cautious than most – preferring to import the Sintra from the US in fairly low volume.

But MPV market stalled at a level below expectations

During 1996 and 1997, this capacity came on stream and the Western European MPV market expanded from around 210,000 units to 350,000 units. But then a problem arose: the market did not evolve as expected. It remained a niche at around that level – 350,000-380,000 units. Serious overcapacity resulted and Ford ended up exiting its joint venture making MPVs with Volkswagen in Portugal. Market reaction to the new breed of vehicle was mixed. Despite heavy Ford advertising pointing out that the Ford Galaxy MPV had a similar sized ‘footprint’ to that of the Ford Mondeo sedan, consumers perceived MPVs as large and truck-like. In some cases, that was literally the case, with slab-sided vehicles such as the Mercedes V-class (eventually considered unfit to be sold in the US) and the Fiat/PSA brethren clearly showing their commercial van design ‘compromises’ (bringing into question the policy of jointly developing commercial and passenger vehicles in this way).

Several key vehicle-operating factors meant that European minivan/MPV demand would turn out considerably less than that of the US:

  • Fuel is approximately four times more expensive in Europe than in the US, making larger vehicles much more expensive to run;
  • Vehicles are also much cheaper to buy in the US – again making larger vehicles a more attractive buying proposition than in Europe;
  • More than one vehicle per household is much more commonplace in the US; the MPV or other niche vehicle may be more typically a leisure vehicle coupled to a daily ‘workhorse’. In Europe, it is far more likely that the MPV vehicle is a sole household vehicle purchase and therefore a niche vehicle is less likely to be purchased than a mainstream one;
  • Europeans are culturally unused to large vehicles unless they are luxury cars; full-size MPVs are perceived as large vehicles in Europe and therefore considered relatively less suited to Europe’s much higher population density, more concentrated urban areas and relatively narrow roads – compared to the US.

Renault Scenic set a new standard

The Renault Espace was a pioneering product in the European marketplace. Its aluminium composite body panels and high level of engineering (with the heavy involvement of Matra) ensured that technically, it was a leader. It could command premium pricing at Renault’s preferred volume level. Renault’s designers aimed to produce a family of monospace vehicles – with the Espace at one end and the cheekily styled Twingo City Car at the bottom. In between, would be a monospace based on the replacement for the Renault 19. That vehicle was the Renault Megane Scenic – launched in 1996. It was immediately a hit and Renault had to totally reconfigure the Megane body mix at the Douai plant. Extra volume had to go into the Scenic.

In the key volume lower medium (or ‘C’ segment) of the market, the Scenic did something very special – and something not foreseen by the product planners who had such optimistic plans for full-size MPVs just a few years earlier. The Scenic offered the same multi-use and flexibility elements as the larger MPVs, but in a much smaller vehicle. By putting the Scenic on the Megane platform, Renault succeeded in defining a new market segment – that of the compact minivan or MPV. Thus the minivan or MPV concept pioneered in the US – that of the one-box design with flexibility of application – had a broader relevance to the European marketplace after all.

New compact MPV product wave underway – underlining segment prospects

Other makers have developed – or are developing – similar products to the Renault Scenic for European tastes, as well as other markets (the Scenic is being made in South America now). GM has been a notable entrant to the fray with the Zafira (which achieves 7 seats, despite being on the Astra platform). Ford is a notable lagger, deciding to stay away until the next generation Focus platform becomes available for an all-new model. Citroen has the Xsara Picasso. At the premium end, the Mercedes A-class is another monospace design. Others are coming. The big test for the durability of the segment will be the next wave of purchases when the initial Scenic cars are sold on. Was it a fad? Will consumers return to more conventional saloon cars and hatchbacks? Will other niche segments prove more interesting? At the moment, indications are positive that the segment will prove to be a permanent fixture in Western Europe. Last year, sales of the Scenic and Zafira alone exceeded those for the whole of the full-size MPV segment. That says it all.

Western Europe: full-size and compact MPV sales by make and model, 1998 and 1999

Full-size MPV















Voyager (incl Grand)








806 (Sevel)




Evasion (Sevel)












Ulysee (Sevel)








Space Wagon












Zeta (Sevel)



Grand total



Compact MPV
















Space Star











Grand total



Source: industry estimates

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