FCA gets ready for the production start of the Jeep Renegade in Brazil. This important market is the second stop of the small Jeep after its first launch in Europe in September 2014. Even if the Renegade had a quick appearance at last year’s Sao Paulo motor show, it wasn’t until last week when the company officially presented the Brazilian-made version to all Latin-American press. The new car is built at the Fiat’s latest and most modern factory, Pernambuco, and will be exported to all Latin American markets. It isn’t clear yet whether the Brazilian Renegade will arrive in Mexico, or this country will receive the European version. At the end of the day, they are the same cars, and only the engines change. Even if production will start in late April 2015, the brand already communicated that the Renegade price will start at R$69.900, which is around 20.500 euro. It is pretty much the same price of the European entry levels, but the markets are very different in terms of purchasing power.
The price is one of the keys for the new Jeep’s success. In a market that tumbles at big rates and almost all local carmakers announce job cuts or temporary productions cuts, FCA goes on with its Pernambuco plant (its second in Brazil) by first launching the Jeep Renegade and then the mid-size pickup. Based on Sergio Marchionne’s announcement, this new plant will be fully operating by the fourth quarter of 2016. Meanwhile the baby Jeep must conquer Brazilian market by selling as much as possible, so the company starts to redeem the big investment. It won’t be easy: Brazilian car sales continue to fall, and even if Jeep has been in Brazil for decades, its awareness is still low due to its high prices. This time is different. Jeep is expected to position the Renegade right as it is doing in Europe: the small and only real SUV, capable. In a country like Brazil, where many places are hard to access, and roads are not always the best, a car like the Renegade can have more sense.
What are its chances? based on its prices, versions, engines and equipment, this Jeep can become an important player in the small SUV segment. When compared to its future main rivals, the Ford EcoSport and the Renault Duster, the Renegade isn’t as expensive as anyone could think. Of course the final decision will depend on what the client considers important to get. For example, the entry-level version of the Renegade is a 4×2 manual transmission and 132 cv petrol engine. It is priced at R$69.900. The Renault is also a 4×2 manual transmission with 142 cv petrol priced at R$72.200. The Ford costs R$75.100 but it has a 147 cv petrol engine with a 4×2 automatic gearbox. The same version of the Renegade but with an automatic transmission costs R$80.900, whereas the automatic version of the Duster 2.0 is priced at R$76.700. In other words, the 4×2 petrol version of the Brazilian Renegade can be the cheapest or the most expensive option depending on the transmission solution. The 170 cv diesel engine is exclusive of the Jeep Renegade as its rivals don’t feature diesel versions.
My own estimations indicate that FCA could sell around 1.500-1.800 units per month during the first months. If the market conditions don’t get worse, that number could rise up to 3.000 units with the arrival of a cheaper version (R$66.000). Anyway, during the first 2 months of 2015, the Ford EcoSport’s and Renault Duster’s sales plunged 33% each, whereas total market registrations plunged 23%. At the end, the success of this new Brazilian SUV will depend on the way it manages current crisis. The other variables such as its features, capabilities, prices and dealer network, are already properly solved.