2018 results: Jeep keeps ahead but doesn’t meet the targets

Thanks to the boost of new launches and the better economic conditions in some key markets, Jeep posted a new sales record in 2018. After the bad results in 2017 when the brand’s volume did not grow following a “lousy job” in Europe and the lack of new products in North America, they are back to the outstanding growth registered before.

Last year Jeep sold 1.56 million vehicles globally, up by a solid 11.4% compared to 2017. This is certainly a very good result considering the situation in global markets. China, USA and Europe didn’t face easy times in 2018, and they are the most important markets for Jeep. The strong growth allowed Jeep to become FCA’s top-selling brand and the most important source of revenue and profits. Jeep was the world’s 4th best-selling SUV brand in 2018.

In fact, the soaring sales of Jeep has a negative side too. The global SUV boom is forcing many automakers to focus their efforts on these vehicles. As the demand asks for SUVs, the brands with the biggest SUV lineups are more likely to gain traction. It is the case of Jeep, that is growing everywhere except in China. But its growth is also at the expense of lower demand for Fiat cars. Jeep is somehow killing Fiat.

Despite the good results, Jeep did not meet the sales target for last year. The idea was to sell 1.9 million units globally, but the small lineup and the problems in China did not allow to achieve the goal. It is then an indicator of how optimistic these targets are, and how difficult it is to meet them without a consistent product plan. Jeep needs more products and to reposition its operations in China.

Results by markets

Although Jeep continues to gain traction in South America and Europe, the brand keeps depending a lot on its home land. USA counted for 62% of its global volume in 2018, or 3 percentage points more than its weight in 2017. The demand there increased by 17% to a record of 973,200 units. It was the 6th best-selling brand over there.

The bad news arrived from China, its second largest market. Due to several reasons, Jeep struggles to grab the attention of the consumer in the world’s largest car market. Its sales sank to only 133,600 units in 2018, against 217,800 vehicles in 2017. Without China, it is impossible to keep the good momentum and to rival with the other big SUV makers like Toyota, Nissan, Honda and Hyundai.

Outstanding results in Brazil and Italy, its third and fourth largest markets. The well-timed arrival of the Compass boosted the growth just when the Renegade started the decline phase of its commercial life. This is the way the brand should operate all the time. The challenge now is to keep this growth without any new model this year. These two markets are a good example of the negative impact of Jeep’s growth on Fiat performance.

Results by models

As expected, the Jeep Compass was the absolute driver of growth last year. With 413,100 units, it is the model of the brand with the highest annual sales in its history. Fortunately for the brand, the Compass is a global product with good results outside the US. In fact, its homeland counted for 41% of its sales; Europe, Africa and the Middle East counted for 19%; Latin America for 17%; and China for 15%. The European volume is due to increase following the announcement of its localization in Italy.

In contrast, the Cherokee is strongly dependent on the US market, as it is not really popular overseas. USA counted for 80% of its global volume, with sales up by 41% thanks to the restyling. Outside the US the story is different with its sales dropping in China (-60%) and Europe (-32%). The Cherokee has to deal with a weird positioning between the premium models and the mainstream ones. It is not neither a premium midsize SUV, nor a proper 7-seat mainstream midsize SUV.

The Wrangler was boosted by the new generation, which allowed the nameplate to outsell the popular Grand Cherokee. In total, this model sold 294,000 units, up by 26%. However, it is not a global product as 90% of its sales remained in USA and Canada. As it is an iconic model, there’s little the brand can do to change this and gain traction overseas.

The top seller in 2017 is now occupying the fourth position in Jeep’s ranking. With more than 7 years in the market, the Grand Cherokee is getting old and the competition tougher. This is why its global sales last year fell by 8% to 274,000 units. Still it was the world’s second best-selling large mainstream SUV, behind the Ford Explorer and ahead of the Honda Pilot. It is supposed to be next model changeover in Jeep’s range.

Meanwhile the Renegade, launched in 2015 enters the decline phase of its commercial life cycle. The brand sold 261,500 units of its smallest model, produced in Brazil, Italy and China. The volume fell by 7% following declines in USA, its largest market and Europe. However, the main problem was China, down 55% to only 17,300 units. B-SUV sales in China fell by 7% to 1.79 million units.

The case of the latest arrival to the family is quite worrying. The Chinese-made Jeep Commander, especially designed and projected for the consumer in China, sold only 13,500 units since its launch in the late first half. China is well known for demanding big 7-seat SUVs, but the recent difficulties of the market and the bad position of Jeep is having a negative impact on the Commander’s commercial performance.