Jeep’s potential fades away

Since the integration of Fiat and Chrysler groups in 2009, and the official establishment of Fiat Chrysler Automobiles in 2014, we have always heard that Jeep is the cash cow of this OEM. It was responsible for a big part of the rapid growth of the Italian-American car maker created by Sergio Marchionne. Jeep has been also an important source of profits due to its positioning in the SUV segment, the world’s fastest growing.

In 2012, at the early stage of the integration, Jeep represented 17% of the group’s global sales. By then this brand sold 702,000 units. The SUV boom around the world boosted the sales of Jeep to 1.05 million units two years later, and to 1.26 million units in 2015. The growth continued up to a peak of 1.57 million units in 2018, when they made up one third of FCA’s global volume.

A sales target missed

In June 2018, a month before his death, Sergio Marchionne claimed that Jeep would double its current sales (2017’s total) by the year 2022. Mike Manley, the brand’s CEO, indicated that by that year, one in twelve of the SUVs sold globally would be a Jeep. The sales target would range between 2.7 and 2.8 million units. Last year, Jeep sold 1.11 million vehicles.

Many unexpected things happened between 2018 and last year: several delays in their product launches (2019), the pandemic (2020), supply chain issues and merger with PSA (2021), and the rise of the EVs (2022). Additionally, five of the six new products planned to be launched between 2018 and 2022 arrived after January 2021, and only one of the three promised BEVs arrived.

Sales at lowest since 2014

The 1.11 million units sold by Jeep last year were the lowest level since 2014. The volume was down by 13% vs 2021. It was even lower than the total registered during the pandemic in 2020 at 1.23 million vehicles. Most of the reason is related to the product lineup.

Last year, a big part of its North American operations were dependent on an aged lineup (Cherokee revealed in 2013, Renegade in 2014, Compass in 2016, and Wrangler in 2017), and on the new generation changeover for the Grand Cherokee. Also, Jeep as an SUV maker is one of the several victims of the increasing popularity of the Tesla Model Y. These factors explain the 11% drop posted by Jeep in USA-Canada last year. These two markets represented 67% of its global volume.

Latin America, its second largest market, saw a moderate decline of 6%, as the drop posted by the aged Jeep Renegade was somehow contained by the new Jeep Commander. Unfortunately in Europe there was no Commander to offset the double-digit drops posted by the Renegade (-23%) and Compass (-16%), which continued to struggle against more modern rivals.

Jeep needs EVs

If Stellantis wants Jeep to shine again it needs to introduce electric products. As the global demand of SUVs seems to be reaching a peak, the carmakers willing to keep an important role there must launch electric solutions. Five years ago everybody wanted an SUV. Today, everybody wants an SUV and many consumers are almost constrained to drive electric. The Tesla Model Y is already the world’s top selling passenger vehicle.

As an SUV brand, Jeep should take the leadership, at least in the West, and become a referent in the electric SUV segments. By doing so, I mean to introduce competitive products that feature the brand’s DNA and arrive on time in the global markets.