Negative impact

Exclusive Marketing Week research reveals that the recent bad publicity over the safety of people carriers has dramatically damaged the sector. Does this signal the end of the road for Tony Blair’s favoured vehicle?

Recent adverse publicity surrounding the safety of people carriers has had a lasting, damaging effect on public perceptions of these vehicles, according to exclusive Marketing Week research.

But demand for multi-purpose vehicles (MPVs) – which have removable seating and can carry up to seven people, making them popular with families – is already on the wane. After several years of strong growth, sales are flattening out. So far this year, some 25,694 people carriers have been sold, according to the Society of Motor Manufacturers & Traders – a rise of just under two per cent on last year, in a car market that has grown more than four per cent.

One source says: “The larger people carriers are gas guzzlers, they are not pleasant to drive, they are hard to park and too big. They will give way to smaller versions. There has also been a revival of estate cars. People are looking for vehicles to suit their lifestyle rather than size.

The safety issue will accelerate the decline of the sector.”

Small gains in popularity

The smaller people carriers are typified by the Renault Megane Scenic, which carries five people and has the usual convertible seating. Sales have reached 66,792 since launch in April 1997 and the car is about to drop the Megane tag in a brand relaunch this summer. Toyota is launching its own car into this sector, the Yaris Verso, another five-seater. Ford, which sells the Galaxy – market leader with some 30 per cent share – is understood to be preparing to launch a small people carrier based on the Ford Focus.

These smaller versions are ideal for the European market – petrol-guzzling larger people carriers are far more popular in the US, where they sell some 2.5 million a year, compared with just 400,000 in Europe.

The results of the MW survey come in a week in which Ford ordered the recall of more than 60,000 faulty Focus cars in the UK and more across Europe and General Motors was hit by a &£3.2bn damages verdict from a Los Angeles jury over the exploding fuel tank of a 1979 Chevrolet Malibu.

There have been no such high-profile cases involving people carriers, but ever-accelerating damages pay-outs in the US put the spotlight on safety issues as never before.

Yet manufacturers in the UK deny the recent NCAP tests (see box) have had much immediate effect on sales of people carriers. A spokesman for Chrysler, which sells the Voyager, says: “We haven’t noticed a great deal of change. Customers have asked for reassurance and we have told dealers to pass on the message that this was just one test, and the Voyager has performed safely in other tests. There have been a small number of cancellations since the tests came out, but nothing major. Dealers have reassured drivers.”

He says Chrysler’s engineers will take on board the results of the crash-tests and may make some changes to the design. But he adds: “It is not something you do overnight.”

Professor Garel Rhys, of the Cardiff Business School, says the NCAP tests alone are not sufficient to damage the whole sector. “People will take on board this sort of test as long as they see a run of accidents and injuries. There have been tests on 4x4s which show they are not as stable as other vehicles, but it doesn’t seem to have harmed their sales in the US. The MPVs have not been shown to be lethal, just to perform badly in tests. On the other hand, there is a correlation between size and robustness more than in many cases.”

Undergoing changes

The market for MPVs is undergoing important changes irrespective of the bad news about their safety. The Chrysler Voyager was the first people carrier, launched in the US in 1983, and the Renault Espace launched in Europe soon after. Their ability to carry up to seven people, or remove seats to give extra packing space, has made them a hit with middle-class families. When Ford launched the top-selling Galaxy in the UK in 1995 the market exploded, and every major manufacturer decided it was time to launch their own model. One reason given for their popularity has been the growth of step-families, giving some parents four or five children to look after and requiring larger cars.

For the manufacturers, people carriers have the advantage of being cheap to build, relative to other cars such as 4×4 s. The four-wheel drive technology is more expensive, but people carriers are sold only slightly cheaper, giving manufacturers higher margins.

Public perception

But the market has become overcrowded and industry observers are talking about a shake-out, which will see many versions disappear. The growth appears to be for smaller people carriers rather than larger ones. According to Simon Binns, client service director for Chrysler at ad agency Delaney Fletcher Bozell, manufacturers are putting less money into advertising people carriers. “Renault, for example, is putting more money into advertising the Megane Scenic than into the Espace,” he says.

The people carriers are a good example of segmentation in the car market, which in other sectors is swamped with a lot of products with little to choose between them in each class. Advances in technology mean that manufacturers can develop new models easily by imposing new bodies on the same chassis. For example, Ford had four models five years ago and has expanded its portfolio to nine.

The MPVs have been a triumph of segmentation, but as a fashionable item, they are giving way to changing styles. The poor crash results can only speed their demise. MW’s survey shows the NCAP tests have influenced the public’s perceptions of people carriers. The new, smaller versions may turn out to be safer as larger models are less robust.

People carriers

Multi-purpose vehicles the Renault Espace and Toyota Picnic have suffered from adverse publicity about the safety of “people carriers” even though they performed best in crash tests, according to research commissioned by Marketing Week.

Tests carried out recently by the New Car Assessment Programme showed that in head-on crashes, some people carriers fail to protect drivers from serious injury.

MW’s survey of 627 car drivers reveals that most of them have a poor view of the safety of people carriers.

The second best-selling people carrier, the Chrysler Voyager, driven by Prime Minister Tony Blair, was the worst performer out of eight models tested, by the NCAP.

The NCAP tests put cars through front and side impacts to test the chances of drivers and passengers escaping death or injury. While the Voyager scored 89 per cent in side impacts, it scored zero per cent in a front impact – which was rated “appalling” by the assessors.

MW’s survey shows that despite the Toyota Picnic being one of the only people carriers awarded satisfactory ratings by NCAP, drivers rate its safety equally with the Voyager. And 13 per cent of drivers also connect the adverse publicity to the Renault Espace, which came top of the NCAP ratings.

The research, carried out by the Automotive Division of Taylor Nelson Sofres, shows that only eight per cent of car drivers believe people carriers are the safest cars compared with saloons – seen as safest by 48 per cent – and estate cars, which are backed by 27 per cent.

When prompted with a list of four people carriers and asked which they believe to be the safest, almost one third (31 per cent) say the Renault Espace, way behind the VW Sharan (18 per cent) and bottom of the table is the Chrysler Voyager (ten per cent) along with the Toyota Picnic.

The survey examines the effect of the recent publicity on drivers’ perceptions. Some 56 per cent say they have seen some of the adverse publicity, while 42 per cent say they have not. Of this 56 per cent, more than a quarter attribute it to the Chrysler Voyager.

Manufacturers of people carriers have sought to play down the results of MW’s research. They say that the NCAP tests will be quickly forgotten by drivers, and sales will only be damaged in the long term if news of crashes and other poor test results are reported in the media.

But Umesh Sharma, director of Taylor Nelson Sofres Automotive, says: “As people carriers are designed to carry the whole family, one would assume that manufacturers would have put their vehicles through similar crash tests. Our research has demonstrated that people carriers are not seen to be as safe as other cars on the road today. Those people carriers that scored badly in the NCAP tests seem to have caused some adverse publicity even for those manufacturers that did well in the crash tests.”

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