FCA playing up price, mpg, but not technology that makes it a plug-in hybrid
Production is now underway of the all-new 2017 Chrysler Pacifica Hybrid at the plant in Windsor, Ontario. The minivan is the only hybrid of any kind currently being made by Fiat Chrysler Automobiles and is the only three-row plug-in family vehicle on the market besides the more expensive Volvo XC90 T8 utility vehicle.
And while technically the Pacifica is offered as a plug-in hybrid that can go 33 miles (53.1 km) on electricity alone, without the help of its 3.6-liter V-6 gasoline engine, the automaker is downplaying its attributes as a plug-in.
It is being marketed as a hybrid to a public that does not fully understand what plug-ins are and who are still prone to range anxiety, Tim Kuniskis, head of Passenger Car Brands, Dodge, SRT, Chrysler and Fiat for FCA North America, told Motor Trend in an interview. “It’s why we talk about a hybrid, not a plug-in. When they see plug-in, they get nervous,” Kuniskis said. And it is why officials are stressing its 84 mpg-e (2.8 L/100km), and not the technology that makes that possible.
Kuniskis notes that the Pacifica Hybrid puts the automaker is in new territory in an industry where most plug-in hybrids are small commuter vehicles—not seven-passenger family vehicles. Being in white space created a conundrum when it came to pricing because there weren’t any affordable benchmarks: the XC90 is a premium crossover that starts at $68,795 USD. The Pacifica starts at $43,090 USD. Both are eligible for a $7,500 USD tax credit.
Kuniskis said he does not know the price sensitivity of the plug-in technology, especially in this current period of low gasoline prices. He wants to make sure price is not a barrier to a Pacifica Hybrid buyer.
In the end, FCA went for aggressive pricing. “When there is a lack of data, you have to make your own data. This is our way to find out what is the true demand for this because we figured there are a couple barriers to buying a car like this,” Kuniskis said. “If I show them a plug, immediately it registers range anxiety.” Minivan owners don’t want to know how it works, they just want to know how the technology makes their family life easier, he said. Some might not even bother plugging the minivan in all the time, he said.
The regular Pacifica with a gas engine is currently selling for $34,000 USD on average with top trim levels accounting for half the sales. The minivan segment in general has an average selling price of about $32,500 USD. FCA decided it wanted to price the hybrid in the heart of the market (including the tax rebate). A buyer can get a Premium trim Pacifica Hybrid for about $2,000 USD less than a comparably equipped gas engine minivan, Kuniskis notes.
The Chrysler brand has 36 percent of the minivan market in North America, but in California the share is only 12 percent as buyers prefer the Honda Odyssey and Toyota Sienna. FCA sees a chance to make significant inroads in California with the only hybrid minivan. Kuniskis expects the competition will eventually offer a hybrid, as well, but he does not know when or if they will offer a plug-in.
And for now, FCA will continue to build and sell the Dodge Grand Caravan which is also made in Windsor on the same assembly line. The legacy minivan sells for substantially less and does not compete with the new Pacifica, Kuniskis said, so it will continue to be sold as long as there is demand. At a certain point new federal regulations will force FCA to stop selling it, but that day is not imminent. Nor does the company need the capacity yet as plans have not progressed to make a Chrysler crossover based on the minivan. That crossover was in FCA’s five-year plan but has been delayed.