Celebrity endorsements always help generate buzz. And there’s no better time to feature one than during the Super Bowl. Remember when Matthew Broderick spoofed Ferris Bueller’s Day Off to plug a CR-V? And who can forget Eminem’s appearance in that Chrysler ad? This weekend, Jeep will air an ad featuring none other than Bill Murray. And he’ll apparently be doing some sort of homage to one of his most famous roles.
Murray is a strange choice to represent Jeep. Then again, he’s a strange choice for just about any product. In any event, Jeep needs to do something to generate business, because the brand isn’t as popular as it used to be.
Jeep finished 2019 with somewhat disappointing numbers. The Cherokee, Compass, and Renegade all experienced double digit declines compared to the prior year. Wrangler sales dropped five percent too. But those numbers don’t tell the whole story. Jeep’s compact crossovers all share the same platform and are almost certainly profitable. The Wrangler’s decreased popularity can easily be explained away by the generational changeover in 2018 that saw FCA boost production of the previous model in a bid to generate additional sales. And the Gladiator debuted to much fanfare.
On the other hand, Jeep recently announced it will idle the Belvidere, Illinois plant that produces the Cherokee and dealers are heavily discounting the Gladiator. With falling demand and no new vehicles officially on the horizon, the brand could use a jolt of energy.
It’s certainly no coincidence that Jeep’s Bill Murray Super Bowl ad will air on Groundhog’s Day. Murray is most likely pulling a Broderick and will star in an ad that recalls the best parts of the movie. Rumor has it his co-stars were also seen at the film shoot, which took place in the same town where the movie was originally filmed.
To me, the ideal Groundhog’s Day themed commercial would have Ned Ryerson pull up next to Phil (Bill Murray) in a Jeep Gladiator and explain that he’s a Jeep salesperson now. He’d say something like “you know, whenever I see a customer looking to buy I go after them like a bull. Ned the bull. That’s me now. I have friends of mine that live and die by the miles per gallon and I say hey! It’s all one big crapshoot anyhoot. Have you heard of the Command-Trac four-wheel drive system? I think this pickup really could be the ticket for you.”
Phil originally just walks away from him the first time. But once he realizes that he’s stuck in the time loop Phil punches Ned in the face, steals the Jeep and the groundhog, and drives it right off the cliff.
You never get Bill Murray to sell something because Bill Murray doesn’t sell things. Hopefully Jeep understands that.
Maybe spend the extra bucks on quality. Then, the customers will come.
– Government investigating Jeep Wrangler frames after owners complain of poor-quality welding, holes and rust
I’m not too concerned about Jeep’s sales either with or without Bill Murray. 2019 was down about 50,000 units total compared to 2018. However 2018 was up 145k units from 2017 which was down 100k from 2016 which was up 64k from 2015 – i.e. it tends to bounce around year to year. These are just the US numbers, Jeep is the rare US brand that also sells some of the same vehicles in multiple international markets (besides just Canada and Mexico).
To be balanced it should probably be mentioned that the Grand Cherokee (the oldest model of them all?) sold more units than ever last year (up 16k to 242k units so a quarter of the total) and I think it’s VERY easy or obvious to see the Gladiator for what it is, i.e. a Wrangler brand extension/variant whose 40k sales over an abbreviated year comfortably make up any Wrangler shortfall while reporting separately and fairly obviously (and expectedly) also siphoned off some Wrangler sales. 4th quarter Gladiator sales were up slightly over third quarter as well.
Note also that 2018 (the year being compared to) was one of the biggest years ever for Jeep with a larger increase than the average “norm” had been up to then.
So you have the GC and the Wrangler line/variants that between them are over half of the total Jeep volume in the US. And both lines showed increases. Jeep as a brand/nameplate was what, the 6th highest sales total last year which is somewhat astounding for a brand so narrowly focused.
I haven’t noticed that Gladiators are being discounted heavily, it looks like it’s more of the basic trim level, not the upper level (Rubicon). I don’t have a breakout but anecdotally (what I see on the street here) the upper level seems to sell better than the lower levels. There seems to be room in the price to discount though, as with any pickup that seems to be the normal business model and supposedly expected (?) Pick off the suckers that have to have the latest at full or higher price, then discount for the rest of the run.
More notable and legitimately harped on is what’s not there, i.e. a three row SUV, which is pretty much the meat of the market. Of course offering the GC in that format would probably kill the Durango off completely and give the Highlander and Explorer a real run (size of GC and HL is almost the same). If you add the current GC and Durango sales together for a rough approximation of volume that a three row GC would do it crushes the Highlander and Explorer with over 300k sales (in its 10th year!) and I’d argue that Jeep has far bigger brand equity than Dodge, thus would likely improve on that total. Going higher/bigger as has been discussed in the form of a Grand Wagoneer for seemingly forever could likely be a bigger cash cow than anything else so far but likely lower volume.
I think Jim summed it up pretty well.
Judging by the reviews I’ve seen of both the Gladiator and the Wrangler I’d say that product is not the problem, the product seems better than its ever been. (Save for the die hard’s who really want a WWII era Jeep with a Hemi transplant.)
Could be a combo of market saturation (everyone who wants one has got one) and MSRP. Go to Jeep’s website and “build your own”. I’m not even talking about the $60,000 Rubicon’s I’m talking about how one decently equipped is roughly $35,000. (And this is from a guy that things the Gladiator is a decent value compared to the other midsize trucks – because of the mechanical things that come standard)
I would want an actual WW2 Jeep with the ‘go devil’ 4 in it. You can’t get much simpler than that unless you get a Model T or Kubelwagen
Mahindra roxor?
Could be a combo of market saturation (everyone who wants one has got one) and MSRP. Go to Jeep’s website and “build your own”.
The base price of the Cherokee, the one that seems to be in the most jeopardy, looks attractive, but start adding options and it rapidly moves into Grand Cherokee prices. The base engine is still the old, inadequate, 2.4. The 2.0T and V6 are much more satisfactory engines, but either costs about $2,000 extra.
The Cherokee’s interior looks cheap too. I was at a show here in metro Detroit a couple weeks ago, and noticed the Compass looked nicer inside than the Cherokee.
Here is a look, inside and out, at the Commander that is offered in China.
I was really just referring to the Wrangler/Gladiator on price.
The school district bought a fleet of Cherokees as base trim 4 cyl auto 4×4. The 9 speed is truly awful to drive.
Given how most of them are used I was a little surprized they didn’t just buy Compass.
Having driven both the Compass and the Cherokee with the upmarket interior, the Compass is perfectly fine but not nicer than the Cherokee. Even though the Compass is “newer”, the Cherokee is quite a bit nicer of a vehicle. That said, the Cherokee I had was equipped with the 3.2 V6, worth every penny as would the 2.0T be. The Cherokee is class competitive. While the sticker prices do get high fairly quick, those are nowhere near what one needs to pay for either of those models. The Cherokee still managed to sell close to 200k units last year (US alone not counting Int’l) not too shabby for that old of a platform that’s probably printing money AND has four other SUV’s in its own showroom to compete against. Note that 2018 was an extreme (high) aberration with almost 240k sold in the US. 2017 was lower at 169k, but 2016 and 2015 were both over 200k units (again in the US). Seems like solid business to me and shutting down production for a week here and there to get demand in line with supply is good business too, just last month someone on here was lambasting FCA for stuffing the sales channel. Can’t have it both ways.
Having driven both the Compass and the Cherokee with the upmarket interior, the Compass is perfectly fine but not nicer than the Cherokee.
Thanks for the input. The Cherokee at the show was probably a lower trim version.
I think in regards to the Wrangler it is a case that most of the people who wanted the new generation have them by now, and it is too soon to replace it.
Maybe Bill Murray will be doing a funny imitation of Matthew McConaughey’s Lincoln spots?
Or this?
build a reliable well put together jeep and maybe ppl will come back. they are cool vehicles… but everyone i know with one last few years is regretting it after warranty.
Not only is Belvidere idled, again, FCA has announced buyouts for essentially everyone who works at Belvidere: 3900 people. with the offer closing on March 11.
So, if everyone at Belvidere accepts the buyout, who will build the Cherokee? Will FCA build the Cherokee?
They could drop all the minivans and build the Cherokee at Windsor, but Windsor is even older than Belvidere. With EU Compass production moved to Melfi, and the 500 and Journey dropped, that would create barely enough capacity at Toluca to build the Cherokee, but then they lose the 3 row business that the Journey picks up. Besides, if FCA closes a US plant and moves the “jobs” to Mexico or Canada, in an election year, they’ll have Trump in their face.
The Steve Plan has been on the table for a year or two: replace the Cherokee with the 2 row Commander and 3 row Grand Commander that were developed for the Chinese market: fresh exterior styling and upgraded interior, on the same platform as the Cherokee, built at Belvidere. Then drop the Journey as redundant with the Grand Commander in the line. Drop the Renegade in North America and direct Renegade prospects to the Compass, now that there is free capacity at Toluca to fill the extra Compass demand. Seems that Mike Manley has lost my phone number however.
I don’t know if you missed it, but according to FCA they have almost 1400 employees on layoff at that plant (from when they dropped the third shift, I don’t know?) and say they would like to make room for them if any of the currently employed would like to move on or retire.
I don’t for a minute believe there is any chance that all 3800 current employees would take a buyout all at once, not all are near retirement and job opportunities can’t be that good there, otherwise the laid off people might have moved on by now as well. And the offer isn’t life-changing or anything.
I’m further assuming that the laid off workers cost FCA something, so in the longer term paying people to sever all ties with the company including any possiblility of coming back “on recall” may make good business sense if it gets some others off layoff status.
I don’t know if you missed it, but according to FCA they have almost 1400 employees on layoff
Yes, those 1400 were laid off last year, when the third shift was abandoned. The press release about the buyout said something about “creating opportunities” for those laid off last year, but, iirc, it didn’t say the intent was to “create opportunities” *at* Belvidere. Even if the buyout was to create opportunities at Belvidere, I would expect the offer to be for a like number of people, around 1400, not 3900. The offer isn’t just for retirements either. There is an offer of a lump sum payment for “voluntary termination”. They could have an eye on cutting the second shift, but I would expect second shift to be about another 1400, so the total for both second and third shift people would be less than 3000.
The new FCA contract, supposedly promised to not close any US plants for the life of the contract, but committed only a paltry $55M to Belvidere, and promised to produce new models on the Cherokee platform. That platform commitment may no longer be operative considering the impending PSA merger, as the intent now is probably to base any Cherokee replacement on the Peugeot 3008, but using a PSA platform may put off introduction until some time after the merger closes, a year or more from now.
Another interesting tidbit, the 2.0T is built at the Trenton, MI engine plant. The new contract calls for opening a second 2.0T line at Kokomo. That will probably be the end of the 2.4, which is built at Dundee. The Pentastar engine line that was at Mack Engine 1 is being moved to Dundee as Mack 1 will now be the final assembly building for Mack Ave Assembly.
For those who don’t follow goings on at FCA, this is a rendering of Mack Ave Assembly when work is done. The building on the right, with the darker grey roof is Mack Engine 1, former home of the Pentastar. This will be the final assembly building The building on the left foreground with the light roof is the paint shop, which is new construction. The building with the light roof in the background is Mack Engine II, which has been idle for a few years. Mack II will be the body plant. The plant is supposed to be up and running by the end of this year. The plant is located next door to the existing Jefferson North plant which produces the Grand Cherokee.
Here’s the exact statement: “FCA confirms that it has distributed information about two voluntary separation packages to approximately 3,900 hourly production employees at the Belvidere Assembly Plant (Ill.) as outlined in the 2019 UAW Collective Bargaining Agreement. These packages are being offered to create opportunities for those employees still on layoff. Employees have until March 11, 2020, to make an election.”
Maybe I’m too trusting but I inferred that the point of getting people to walk away was to get the laid off people back onto THAT particular line. I assumed it was cheaper this way than to offer the laid-off people a retirement or walkaway package but that’s a guess on my part, perhaps that’s how the referenced contract reads, I have not read it. If new jobs open at a different plant then I further assumed that a currently laid off worker gets a crack at it before a currently employed worker. It doesn’t really make sense to buy people out at Belvidere out so that a laid off worker MAY have an opportunity at XYZ Anywhere But Belvidere, that seems a stretch and certainly not if they need those people in the first place.
https://www.rrstar.com/news/20200128/3900-employees-at-belvidere-assembly-plant-offered-buyout-packages
According to the union spokesperson referenced in the article I read (that seems to be the same article disseminated to multiple outlets) FCA spent over $2billion on the Belvidere plant within the last fifteen years. Perhaps it doesn’t need more than the $55 million you mentioned to keep producing 200k Cherokees for the US and however many for ROW.
You don’t seriously think that for a $60k payout every single employee at Belvidere would leave, do you? That would be a serious stretch. I’m sure they are smart enough to figure out the math, i.e. $60k gets you 20% walkaways, $100k gets you 40% walkaways, $1 million gets you 100% walkaways. Actually I’ll bet you could not get all 3800 to walk away even with $1million each, some people just want to work where they are and keep working. But $60k? No way, that’s not even a year’s pay once you include benefits.
Well, we’ll see how it shakes out.
The new engine line in Kokomo will add over 1,000 jobs, next year. It’s 233 miles by road from Belvidere to Kokomo. Guys taking a transfer like that, and living in a little apartment, while the wife and kids stay in the house in the town where they used to work, happens a lot these days.
I had not heard that an engine line was coming to Kokomo – they have been Chrysler’s transmission center going back to the days of the Torqueflite, and still are, but engines are new. With Delco/GM in eclipse over the last decade or so FCA has become the 800 pound gorilla of Kokomo industry. If something ever happens to them Kokomo is going to feel it majorly.
From my understanding Illinois has not been the most business-friendly state in the midwest in recent years, so I wonder if FCA is packing up and shuffling the deck to get some things out of Illinois and into more friendly environs.
Not Jeep related, but…
In the mid 80s my grandparents retired from the west side of Chicago to Woodstock, IL, where Groundhog Day was filmed. On weekends we’d drive up there from the city and watch them film in the town square. IIRC as part of the deal to film, the production company replaced the majority of the business signage on the square.
I haven’t been to Woodstock in a very long time—my grandparents passed away not too much longer after the film came out—but at that time it was a really nice town. Had I known this commercial was being shot I might have made the trip back out there for old times sake.
Am I to understand there’s a ballgame of some kind this weekend?
Doesn’t matter. Pitchers and catchers report in two weeks. That’s what matters.
As far as new vehicles I think a new Cherokee and grand Cherokee are listed as coming out in the next 2 years along with the grand wagoneer.
As far as new vehicles I think a new Cherokee and grand Cherokee are listed as coming out in the next 2 years along with the grand wagoneer.
That was the plan when Marchionne released it in June of 2018; new Cherokee, a “low D 3 row” which is probably the Compass derived 3 row under development, a new GC and a new E segment 3 row. That new E segment 3 row is slated for the new Mack Ave Assembly currently under construction in Detroit.
Of course, that plan was announced a year and a half ago, long before the proposed merger with PSA. The Pug 3008 and related 5008 are the right size to be used for a new Cherokee and related 3 row to replace the Journey, but the merger is still a year or more away, but FCA is trying to get rid of the entire Belvidere workforce this year.
Here is the product release matrix from 2018.
That new Bronco could siphon off a lot of future Wrangler sales plus I think that Mustang Mach E could be a big competitor to the other Jeeps for sales to young women and soccer moms
I think Jeep needs to make it on product, and Superbowl commercial hype is just that.
Having said that, the ad just ran and despite my expectations, it was well done.
Agreed, unbidden my wife said it was her favorite ad this time, perhaps tied with the emotional Google one.