More Jeep in emerging markets

It seems Chrysler’s plans to enhance Jeep presence worldwide begin to take place. The brand expects to sell around 800.000 units by 2014 as it was mentioned in recent plans, so it needs urgently new markets to expand its presence and therefore its global sales. Though Jeep is one of the few 100% global brands of Fiat-Chrysler alliance, its dependence on North America’s car market is still its major problem. At the same time Jeep is highly well-recognized world-wide, which means the off-road company has a big potential. It is why Sergio Marchionne, Fiat and Chrysler CEO, wants more from Jeep. Recently he confirmed Fiat’s intentions to establish a new factory in Russia, where they “are working to close a deal”, according him, who said “I’m really interested”. His intentions are not only to produce Fiat brand small cars, but to begin local manufacturing of Jeep models, as they are becoming popular in the last years. Russia will become the largest car market in Europe in the next years as many car makers continue to arrive with their investments in a fast growing market. Extremely dominated by local production, due to high taxes to imported cars, Russian car market will face interesting years of growth and more competition to its historical local Lada. If plans will be on time, the first Russian Jeeps must be available in 2014.

Last year more than 600.000 SUV were sold in Russia, 25% of total sales. From them almost 45% correspond to mid-sized SUV (C), though the best-selling model belongs to B-SUV Segment. Those numbers, and sales growth most of SUV had in 2011 compared to 2010, tells how important that segment is in Europe’s second largest market. Source: bestsellingcarsblog.net

Sales figures for Russian market, and Fiat and Jeep brands. In a very unstable market, Fiat seems to lose a big market share while Jeep continues to sell more and more. 2012 data for January-September period. Source: Autoblog Español, http://www.carsitaly.net

Meanwhile more information comes from India. As it was said some months ago in another post, Indian specialized press has said that Jeep will arrive in late 2013 with two models, the Wrangler and Cherokee. Though it is not confirmed yet, Fiat will be in charge of the distribution dealerships which will be separated from Fiat business, but will be part of the same company. It is also expected to arrive the Grand Cherokee. In this case the models offered will not be produced locally no matter the fact that Fiat has already a production plant shared with Tata Motors. Indian market is still strongly dependent on small cars (A and B segments), while big and luxury cars and SUV are rare to be seen, despite the interesting growth in sales volume those segments are having. As Russia, India is expected to increase the volume of its car sales in the next years. However sales target for Jeep should not be among big numbers, at least at the beginning.

Few data from India reveal that SUV segment is still small in terms of units sold but is getting big. Local and cheap products are the most popular. Source: bestsellingcarsblog.net, FGW Data basis

Finally, there is China in the plans. If Jeep wants really to reach more than 800.000 units from current 550.000 cars they sell, they must consider China to boost their numbers. Though Jeep brand already sells some of its products over there, it needs to produce locally to reach big numbers. The good thing is that despite high prices of its imported SUV, Jeep has managed to increase its sales figures in the last months. According to Automotive News, ‘Fiat is in very detailed conversations with its Chinese partner, Guangzhou Automobile Group Co., about making Jeeps’ over there. At the moment they analyse what products to produce and establish sales target. September Year-to-date sales figures indicate that Jeep sold 33.463 units in China, while they reached 2011 sales volume in July 2012. Those numbers are extremely good indicators of the good scenario local products could meet, as all Jeep SUV are imported with extremely high taxes. Fiat’s intentions are to add one model to production line every 12 months, after the launch of Fiat Viaggio (aka Dodge Dart) in late June. Following Chinese car consumers trend, Fiat focuses on mid-sized sedans and larger SUV to increase its marginal market share.

SUV Segment counts for around 13% of total Chinese market. Estimated data for SUV market in China in 2011. Only locally produced products included. Source: bestsellingcarsblog.net, FGW Data basis

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One response to “More Jeep in emerging markets

  1. Pingback: Looking at the other China | Fiat Group's World·

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