July 12 (Bloomberg) -- Chrysler will cut the price of its redesigned 2008 minivans by as much as $3,585 while adding features to help maintain dominance in the vehicle segment it created more than 20 years ago.

New or improved equipment on Dodge Caravan and Chrysler Town & Country models includes a flex-fuel engine capable of running on E85 fuel, electronic stability control to stop rollovers and tire-pressure monitoring systems, Auburn Hills, Michigan-based Chrysler said today in a statement.

The minivans, due to reach showrooms in September, are part of Chrysler's bid to re-establish itself as an independent U.S. automaker as Cerberus Capital Management LP completes the purchase of an 80.1 percent stake from DaimlerChrysler AG.

``The minivan launch is so important for Chrysler,'' said analyst Erich Merkle at consulting firm IRN Inc. in Grand Rapids, Michigan. ``They don't sell or produce more of any other product than the minivan. It is synonymous to Chrysler.''

Steve Landry, Chrysler's North America sales chief, said the automaker sought to lower the suggested retail prices to avoid offering incentives to sell the minivans.

``We were also able to reduce some of the costs in the building of the product,'' he added.

For example, Chrysler used existing parts for components such as knobs and latches rather than making them from scratch for the new models, Minivan Program Manager Emily Graffeo said.

Lower Prices

The new Caravan SE will be priced at $22,470 while the SXT model will cost $27,535, Chrysler said. Those prices are $1,950 and $970 less than the current models, respectively.

The Town & Country LX will be $23,190, a reduction of $3,585, or 13 percent. The Touring version will cost $28,430 and the Limited will be priced at $36,400, or $850 and $935 less than their respective predecessors.

All the prices include a $730 destination charge.

Chrysler's 2007 U.S. minivan sales have fallen as the entire segment declines. Town & Country sales through June dropped 16 percent compared with a year earlier, according to Autodata Corp. of Woodcliff Lake, New Jersey. Caravan sales slid 18 percent.

Incentives on the 2007 minivans are as much as $4,500, Landry said. Price cuts and new features should help the automaker revive 2008 model-year sales while allowing Chrysler to maintain its current share of the minivan market, he said.

Chrysler had a 41.9 percent share of U.S. minivan sales through June, according to Autodata.

Demographic Shift

The automaker, which introduced the minivan concept in 1983, will benefit from a shift in ``population demographics over the next several years,'' Landry said. He said he expects the U.S. minivan segment to average more than 1 million units annually over the next few years. Through the first six months, sales totaled 425,562, according to Autodata.

``You are seeing the kids of the Baby Boomers having kids of their own,'' Landry said. ``We see the need for vehicles that will carry more starting in 2011.''

Chrysler plans to move quickly to gauge consumers' reaction to the new models through a phone survey of buyers within their first two months of ownership, Landry said. He said he also wants to bring together customers for outdoor gatherings to discuss their vehicles.

The 2008 Caravan and Town & Country will be sold first to retail buyers rather than fleet operators such as rental-car companies, Landry said. The vehicles will be built at plants in Fenton, Missouri, and Windsor, Ontario.

Working With Cerberus

Separately, Landry said his interaction with Cerberus has been positive. He also said he anticipates continuing to report monthly sales results once the acquisition is complete later this quarter. Cerberus Chairman John Snow has said Chrysler no longer will release quarterly financial data.

Landry also said Chrysler dealers are submitting more requests to buy or sell dealerships, under a program to thin their ranks to increase efficiency and boost each operator's profitability. Chrysler has about 3,700 U.S. dealers.

``We are entertaining 30 deals a month,'' Landry said. ``Sometimes it is six dealers going to four, and sometimes it's two to one.''

To contact the reporters on this story: Jeff Bennett in Southfield, Michigan at jbennett17@bloomberg.net

Last Updated: July 12, 2007 15:41 EDT