By Nora Naughton
Fiat Chrysler Automobiles NV is amping up the spotlight on Jeep,
asking dealers to build stand-alone showrooms and rolling out
larger, more expensive models to appeal to more luxury-minded
buyers, including a modern-day Grand Wagoneer.
The company's efforts come as Jeep is facing more competition
than ever in the U.S.'s highly lucrative SUV market and as sales of
its other mass-market brands such as Chrysler and Dodge have
struggled in recent years.
Ford Motor Co. earlier this summer unveiled a new line of Bronco
SUVs that its executives say will take direct aim at Jeep, which
has dominated the off-road-adventure category for decades.
On Thursday, Jeep showed a new version of the Grand Wagoneer, a
long-planned large SUV whose name is a throwback to the simulated
wood-paneled model that became popular in the 1970s. This vehicle,
which is expected to retail for more than $100,000 when fully
loaded, will be one of several big SUVs coming from Jeep in the
next year as Fiat Chrysler aims to move the brand upscale.
As big pickup trucks and SUVs have made a comeback, due in part
to low gasoline prices, brands like Jeep are dusting off historical
nameplates, hoping to play on buyers' sense of nostalgia for once
iconic vehicles.
A Jeep Wagoneer is also in the works, along with a new Grand
Cherokee and another, still-unnamed, large SUV that will have three
rows of seating. Jeep is also pushing to add hybrid, plug-in
options to new and existing models, including the Wrangler, looking
to diversify its lineup further.
"We view this as a time when we cross into a new era," said
Christian Meunier, Jeep's global president.
For Fiat Chrysler, Jeep is among the company's most recognizable
nameplates and a big profit driver in North America. The expansion
of the Jeep brand is critical for Chief Executive Mike Manley, who
is trying to steer the company through a pandemic that is crushing
auto-industry earnings and execute a merger with France's PSA Group
to create one of the world's largest auto makers by sales.
Mr. Manley, who ran Jeep for years before taking the top job,
has tried to move the brand upmarket and expand it globally. He has
pressed to increase sales overseas, particularly in China, and add
smaller Jeeps that can better meet emissions requirements in places
including Europe, where SUVs are rising in popularity.
In the U.S., Fiat Chrysler is constructing a $1.6 billion
factory in Detroit that will build two of the new Jeep models. That
plant is scheduled to open next year.
While Jeep has had success in recent years with its latest
Wrangler, it has struggled with lower-priced models such as the
Renegade and Cherokee, which haven't sold as well and are now
starting to age.
Jeep's sales in the U.S. declined 5% last year to 923,920
vehicles, and the brand's share of the SUV market slipped to 11%, a
percentage point lower than 2018, according to research firm Motor
Intelligence.
Michelle Krebs, an analyst at Cox Automotive, said part of the
challenge ahead for Jeep is that cheaper models have targeted
budget-minded buyers with lower credit scores. That consumer base
is now shrinking in the pandemic-induced recession.
"They've got to get different kinds of customers at the high
end," Ms. Krebs said.
With more buyers flocking to SUVs, particularly as the virus
prompts more Americans to leave cities and avoid air travel, the
bigger Jeeps could be arriving at an optimal time, she added.
Still, they will confront stiff competition. The SUV market has
grown far more crowded over the years as Asian and German car
makers have expanded into bigger offerings.
Ford and General Motors Co. have updated their big
people-haulers in the past few years, hoping to tap this highly
profitable part of the U.S. car business as more buyers move away
from cheaper small cars and sedans.
Fiat Chrysler is hoping to help the brand stand out by
intensifying efforts to build more Jeep-only showrooms.
These showrooms, which aim to separate Jeep from the more
mainstream vehicles offered by Chrysler, Dodge and Ram, have
specialized staff and displays of the latest Jeep accessories and
apparel.
Jeep now has 59 stand-alone showrooms in the U.S. and is
planning a few hundred more in the coming years, mostly in larger
metro areas, a company spokesman said.
Dealers say the larger Jeep models are long overdue, in part
because the lineup now lacks the types of family-oriented vehicles
offered by Ford and GM. That has resulted in customers' abandoning
Jeep when they need to size up, the dealers say.
"The younger buyers love the Wrangler, but what happens as they
get older and have kids?" said Doug Moreland, who recently built a
stand-alone Jeep store in Fort Collins, Colo.
The Grand Wagoneer, which Fiat Chrysler showed as a concept
Thursday, doesn't have the same faux wood paneling made popular by
the older models but instead features a more subtle teak trim in
the roof rails and headlights.
Inside, the new model has multiple multimedia displays,
including one embedded in the dashboard on the passenger side and
others in the second row. The concept shown was a plug-in hybrid,
an option that Jeeps said it is making available on all its future
models.
Jeep will release the Grand Wagoneer and Wagoneer as part a
sub-brand that the company hopes will distinguish these two models
as more premium options, Mr. Meunier said. The Wagoneer, which Fiat
Chrysler has yet to reveal, is expected to start at around $60,000,
he said. The company will start building both models early next
year.
(END) Dow Jones Newswires
September 03, 2020 10:23 ET (14:23 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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