CC readers know the storied history of Jeep. Born in the lead-up to war by Willys-Overland, bought by Kaiser in 1953, then sold to AMC in 1969, moving to Chrysler in 1987, and the subsequent transforming to Daimler-Chrysler, Chrysler LLC, Chrysler Group LLC, FCA US LLC, and ultimately Stellantis in 2021. During each of these transitions, one thing remained consistent – Jeep’s success in the market and, in turn, profitability. But is Jeep’s reputation as the “last brand standing” coming to an end?
Well, things aren’t looking good. Jeep sales are down 33% from 2018’s peak, when 972,227 Jeeps were sold in North America. In 2023, the brand sold 642,924 vehicles, the lowest sales figure in 11 years. For the second quarter of 2024, sales decreased 19% over the similar quarter in 2023. Just as an aside, Stellantis as a whole saw a sales decrease of 21% compared to a year ago.
So what’s going on at Jeep? My take is that the brand’s problems are more the result of bad management than anything else – with two poor decisions in particular being key;
Diluting the Brand by Trying to Foist Faux Jeeps on the Faithful: You may remember the first-gen Jeep Compass and Patriot. On the other hand, you may not – they weren’t what most consider “memorable”. Jeep’s executives thought they could put their seven-slotted grille on economy car bones and perhaps bring in some new buyers without offending its core base. I think that was a wrong assumption. While they might have been barely adequate entry-level models at most companies, for Jeep enthusiasts, they were clearly “pretenders”, not “contenders”. The follow-on Jeep Renegade, largely Fiat-based, just added to the dilution.
Leaving Its Customers by Going Upmarket: I can remember when the lowest priced Jeep on the showroom floor was a base model CJ5/7. In 1978, a year I almost bought a CJ7, the base price for that model was $4290 – or about $21,000 today. Look for a base model Wrangler ($31,995) in a current showroom and you’ll likely come up empty. What you will find are tons of Rubicons and Saharas, which start at $48,690 and $51,090 respectively. With popular options, most will sticker far above that; data from CarEdge shows the Wrangler’s average transaction price is $59,487. The bonkers Wrangler Rubicon 392 starts at $94K before dealer gouging, with the “Final Edition” model listing at $101K. However, I don’t think the decision to go upmarket was entirely the wrong call – marketing the Grand Wagoneer and Grand Cherokee as competitors to Cadillac and Lincoln was smart – and looks to be successful in the long term. But the rest of Jeep’s lineup is severely overpriced.
Are Jeep’s problems acute or terminal? I have faith that there’s a lot of potential Jeep customers still out there, just waiting for the “ship to right itself.” But what’s the best way to do that? I’d axe the current Compass and Renegade – they certainly are not “Jeeps” in the traditional sense and are mediocre vehicles at best. The new Avenger being sold in Europe looks like a much more competent and compelling model, and should come to North America with both an ICE and as a BEV. Then I’d turn the accountants loose on the Wrangler and find a way to de-content it to achieve a base “stripper” price of $24,995, with a more fully optioned Sport model starting at $27.995.
But that’s just my view – what are your thoughts on Jeep’s recent problems? Can it be saved once more and continue its legacy as the “last brand standing?”
Jeeps problems are (like many others) exaserbated by the movie to SUVS, crossovers and melted jelly beans. Younger target buyers have no loyalty and frankly don’t realize what great vehicles are unfortunately gone. Of course, it’s ALL about profits, Likely the only survivor will be RAM, which doesn’t even use the Dodge name. WP must be spinning in his grave. And PLEASE don’t say Stellantis! 🤮
It is about time, Jeep’s corporate ownership faced serious rejection of their product. Poor build quality, diluting the brand, and an overpriced product, should have burned them long ago. As the collapsing economy, has devastated their sales. They really did ask for it.
the collapsing economy
I see you’re in with the 55% of Americans who think we’re in a recession and that the stock market is way down and that unemployment is at a 50 year high. of course the facts on all three are the exact opposite, but facts are so over-rated these days.
https://www.theguardian.com/us-news/article/2024/may/22/poll-economy-recession-biden#:~:text=The%20poll%20highlighted%20many%20misconceptions,GDP)%2C%20has%20been%20growing.
I know this is a controversial topic, but in my opinion, metrics such as unemployment rate, stock market performance and GDP are poor indicators of regular people’s perception of the economy. I wouldn’t say that our economy is collapsing, but at the same time I think much of that economic data masks a stark reality.
What I mean by that is, over the past generation or two, a low unemployment rate has masked significant underemployment, where people are unable to find decently-paying full-time jobs. In fact, I believe our gradual transition to a service-oriented, part-time, low-wage economy has been the single most disastrous thing to the middle class. But that’s not represented in macro-level economic analyses, and in fact that surfaces as just the opposite – showing high employment rates and healthy corporate profits.
Similarly, people’s perceptions of inflation is often pegged not just to month-over-month or year-over-year increases, but rather to the cost of big things that folks don’t buy every month. Things like durable goods, insurance premiums, and of course cars.
The Guardian article does hint at this:
…but then goes on to dismiss that “emotional reality” because it “defies statistics.” I think more compassion for what people are really going through would be beneficial for people who write these articles and for people who guide our public policy. People who live paycheck-to-paycheck don’t care too much about official statistics or the stock market, and I can’t blame people for saying that their quality of life is getting worse.
I fully agree that a large segment of our population’s perception of their economic situation is very much real, and I was not trying to paper over that with economic statistics. Nevertheless, it is disconcerting (at least to me) that a majority of Americans actually think we’re in recession and that unemployment is at a 50 year high. And why do they think that, rather than just grumble about high prices? Because it’s being fed to them daily by certain elements of our political voices. When I listen to one of our presidential candidates, I hear things that are very far from the reality that I know, such as all out cities going down the tubes, the country going down the tubes, everything going down the tubes. (well, “tubes” doesn’t do justice to what I hear).
My point is that 50 or so years ago, when almost all of our news from Walter Cronkite and his cohort, Americans all heard the same real facts, not an endless stream of lies and distortions.
My bringing up this survey is much more about it reflecting the extreme polarization of society, down to the “facts” that they are exposed and then regurgitate, then it was about debating the issues affecting a substantial percentage of Americans.
Whereas I don’t deny the challenges many Americans face economically, I am always a bit perplexed about their financial choices, such as buying expensive trucks and SUVs and financing them with 8 year loans. And I can think of other examples. I think the lack of mandatory personal finance classes in high school is a serious disservice to children and young adults.
I’m trying not to sound preachy, but the reality is that the kind of jobs the economy creates has always been changing, and will continue to change. Yes, America enjoyed an exceptional period from 1946 to about 1973, but that really was exceptional in key ways. There are other areas of the economy that are very strong and growing fast, and it’s not just low-wage service jobs. And many segments of the economy are struggling with very real hiring shortages for lack of suitable applicants. The labor shortages are not a mirage, and lower wage jobs have had the fastest wage growth of any in the past 4 years or so.
So while the adage “perception is reality” applies particularly in the political realm, as someone who follows the dismal science avidly, statistics are
the only way to objectively measure the economy.
“such as buying expensive trucks and SUVs and financing them with 8 year loans”
I can understand financing houses with mortgages, but why do so many people take out loans again and again to buy cars? Sure, take out a loan to buy the first car, but after that’s paid off, save first (by continuing the monthly “payment’ into a bank account) before buying another car. Most new cars today, even entry-level ones, last longer than typical car loans, so keep driving the paid-off car until enough is saved up to buy a replacement. It’s just a “phase change.” Saving instead of borrowing has many advantages … not the least of which is that bank account balance could come in handy in case of sudden job loss, etc (whereas those with an outstanding loan are at risk of having their car repossessed after loss of employment)
De-dollarization is happening. Global trade volume in the US dollar, is decreasing. Saudi Arabia is now selling gasoline, in other currencies. Economic sanctions, no longer have the same impact. The US is slowly losing its dominance as the world’s leading economic power, as the country is $34 trillion dollars in debt, and growing.
As US hegemony is being threatened, economic competitors are pushing very hard, for a multi-polar world. The top 10% of Americans hold 93% of all stocks, the highest amount on record. As the imbalance between the haves, and have-nots, just grows.
Your country spends heavily on it’s military, and wars, while your infrastructure and healthcare (for example) at home, suffer. It’s not sustainable, at this rate.
If anything a weaker dollar would help American exporters. As it stands there are many other powers who would dearly love to de-dollarize, particularly Russia and China, but their own currencies are both too heavily manipulated for markets to trust while the likeliest alternatives – the pound sterling and the Euro – are just as tied to the Western order as the dollar is.
The Guardian and ‘facts’ don’t belong in the same sentence. Please just stick to cars, Paul. This isn’t the first time you’ve allowed your sanctimonious political commentary to grace these pages. It’s not appreciated.
And gaslight all you want about the economy. Nobody in the real world is buying it. SMH.
Thank you for proving my point.
I agree that Jeep should market vehicles in two categories, The Wrangler and Gladiator in the off-road segment. And Grand Cherokee and Wagoneer int eh luxury SUV category do not try to sell in the small crossover market.
One concern is that the Wrangler continues to score poorly in the reliability ratings. They need or spend more money fixing the quality than they do creating new products. Making a stripped down, reliable Wrangler would go a long way towards rebuilding the Jeep brand. But give up on the crossovers. Those could have easily been branded as Dodges.
For decades there was no competition to the Wrangler. The new Ford Bronco mat change that. As for sales, Dodge and Chrysler dealers would be dancing in the streets for those numbers. Despite lower sales, Jeep and Ram are cash cows for Ma Stella in the US. Their Fiat/Alfa/Maserati invasion flopped, and it seems they don’t really know what to do with Dodge and Chrysler.
There are so many things I don’t understand about the current US auto market, and about the way Stellantis is approaching it. Jeep has certainly run very aggressively up the price ladder. This is great in a time of a hot economy and constrained supply, but that is not where we are now. It is not just Jeep – when I recently spent some time in a Mopar showroom, there was a Ram pickup on the floor with a sticker of well over $100k. They seem to be milking Jeep and Ram and putting very little effort into everything else.
Stellantis seems to be using the Jeep name the way GM/Oldsmobile used the Cutlass name in decades past – take a popular name and put it on everything. It will be interesting to see how the new Charger stacks up when it gets here. The now-discontinued Chargers and Challengers had a solid fan base and steady (if not spectacular) sales. I am not yet sure that Stellantis will capture them with this new car.
Back to your original question – I fear that the modern Wrangler has gone the way the Grand Wagoneer went in the 1980’s. The guy who longed for a 60’s-style bare bones Wagoneer was out of luck after probably 1979 or so. Wranglers exist now to burnish the lifestyle of the high-income suburbanite. When the high-income suburbanite’s tastes change (as they always do) Jeep will be in trouble.
There are so many things I don’t understand about the current US auto market, and about the way Stellantis is approaching it. Jeep has certainly run very aggressively up the price ladder.
Tavares recently said he had made a “mistake”, as Jeep inventories pile higher and higher.
What is his solution? Accept a lower ATP and GP on Jeep branded vehicles? Nope. He wants to cut costs. There have been layoffs of engineering people in Auburn Hills. So many layoffs of US based product people there is speculation the office tower in Auburn Hills will be sold, because there will be no-one left working in it.
Tavares’ cost cutting plan involves sending the engineering work to Morocco and Turkey, because those engineers work cheaper than US or EU engineers.
What is Strabismus’ record on engineering. Take a look at the pieces on youtube and elsewhere, about the rate that the “wet” timing belt on Peugeot engines deteriorates. The damage doesn’t start when the belt breaks. The damage starts long before, as bits of rubber and fiber shed off the belt, fall into the oil pan, and are sucked into the oil pickup, clogging it. It fairness to Peugeot, Ford has gone the same way, with the same results.
https://www.detroitnews.com/story/business/autos/chrysler/2024/06/13/stellantis-ceo-cites-arrogant-mistakes-in-u-s-market/74088839007/
“it’s a Jeep thing, you wouldn’t understand”.
Oops, image attached now.
Good riddance!
My comment from a British perspective. The brand that started as a Jeep copy – Land Rover is one of the few ‘British’ brands left (they aren’t British owned), but they have abandoned the traditional farmer/construction market to go ever more up market.
Stellantis have recently (and quite deliberately during a general election) threatened to close their remaining British factories which currently assemble vans. They probably will, PSA group which forms a major part of Stellantis closed former Chrysler UK factories in favour of Continental European ones.
Fiat and Peugeot are terrible at brand management and don’t understand the North American market, so don’t expect anything except more badge engineered Peugeots to have the Jeep name.
I need to make it clear that I am so business-savvy that, say, if given the chance, I could make Ferrari’s brand value evaporate within months. I’m that good.
With my qualifications in mind, the question of whether or not Stellantis will do in for Jeep is a curious one: my guess would be “possibly”, and for reasons cultural and chauvanistic and unintentional.
Stellantis is 21% owned by the super-rich Agnelli and Peugeot families, with a French bank having another 6 or so % chunk. The management (as best I can tell) is entirely from FCA and PSA (as was), that is, entirely European. And the experience of Euro companies in North American cars hasn’t been encouraging. Daimler-Chrysler springs to mind, of course.
Now, 27%-odd Euro ownership isn’t controlling, but it’s very influential, as, naturally, is pure Euro management. Quite apart from the “not-getting” the subleties of a market, there’s things like (imaginary) “Do we close Brampton, Ohio, or Rennes, France?”, that sort of thing.
You’d hope shareholders started arcing-up before any management started to kill such a valuable brand.
But regardless of the Euros now in charge, the perceived quality of Jeep products (outside the USA) is really poor, and THAT alone is what could do for good old Jeep before anything else. Sadly, the (former) PSA brands are considered pretty crap too, which doesn’t portend too well.
And the experience of Euro companies in North American cars hasn’t been encouraging.
Porsche, VW/Audi, Mercedes, BMW, Ferrari, would beg to differ.
Stellantis is truly a multi-national corporation headquartered in the Netherlands. CEO Carlos Tavares is a very bright guy, and understands the realities of the US market quite well. Many/most of his key management team heading up the US brands are Americans. And Stellantis did very well here until the past year or so as interest rates rose dramatically. Their emphasis on Ram, Jeep and other larger/more expensive vehicles has been hit hard by drastically higher interest rates as well as competition, like the Ford Bronco. Stellantis stock was doing much better than Ford or GM until just the past few months.
FWIW, if I had to invest in one of those three companies, it would be Stellantis, because I think Tavares is one of the few truly exceptional automotive CEOs. He’s facing some very real challenges, but he seems to thrive on that.
CEO Carlos Tavares is a very bright guy, and understands the realities of the US market quite well…. Many/most of his key management team heading up the US brands are Americans
The net has eaten my reply about interest rates as well.
Tavares recently admitted he made a “mistake” in the US. He has announced a cost cutting program, which includes laying off so many Americans in Auburn Hills there is chatter the HQ building will be sold, because there will not be anyone left working in there.
Tavares has announced they will be moving engineering to Morocco and Turkey, because those engineers work cheaper.
Tavares is the one CEO who reminds me more than a bit of Elon Musk. And Musk has been cutting costs (and prices) relentlessly. Maybe the two of them see the writing on the wall with the inevitability of competition from China more clearly than the others? Tavares is facing that issue in Europe right now, and it’s just a matter of time before it hits here too. And Musk faced that in China already several years ago. I hate to say it, but only those with low costs are going to survive the coming wave of low cost Chinese EVs.
This country (automakers included) are focusing on the rich. Of course base model Wranglers start at $32,000. Any one of the pick up lines start at $40,000 and a not so equipped Honda SUV rings in at $45,000. It is an insult to common America to charge $100,000 for a V-8 Wrangler, $90,000 for a loaded pick up or $120,000 for an Escalade? Shame on them, & shame on us for supporting such nonsense.
A huge problem these days is automakers are not selling vehicles, they are selling monthly payments. A lot of people don’t keep their vehicles for longer than a standard lease period, and then move on to the next vehicle. And consumers are falling for it as they focus too much on what their monthly payment is. Still, it doesn’t help that modern Jeeps are vastly overpriced and not very good quality.
One could scoff at the original Compass/Patriot, but those twins sold over 1.27 million units in the U.S. alone. That itself probably allowed us to even be having this discussion today. When the world turned to crossovers en masse, it only made sense that Jeep would field entries, and I actually think it wise that they have kept these particular types of the “SUV” on the small side in their fold as to not ‘dilute’ larger ‘real’ Jeeps. Before I’d lay blame on the smaller models tarnishing the brand with potential buyers I’d be pointing the finger at Jeep’s track record regarding reliability and poor build quality. I’d also like to point out the Wrangler 4xE; if you are going to talk about brand traditionalists and Jeep, one cannot fail to mention the paradox that is the off-roading plug-in hybrid.
One of the more fascinating aspects of current Wrangler sales is that the best-selling version is the 4xe.
At least that’s what I’ve read.
The 4xe’s success is due at least in part to the fact that in several states that is the only Wrangler that dealers can order for stock, the non-PHEV models are custom order only. https://www.kbb.com/car-news/jeep-parent-stops-stocking-some-gas-powered-cars-in-14-states/
My take is that Jeep is falling into exactly the same ‘lifestyle’ vehicle trap as, say, Harley-Davidson. No one is buying a Wrangler because it’s practical; they’ve bought into the whole outdoors ethos done so well by Jeep’s marketing team. It goes a long way to explaining how a vehicle (Wrangler) is almost always at the bottom of reliability rankings yet, conversely, manages to score the highest in terms of resale value.
This maintains a constant, loyal following, which is exactly what Stellantis is counting on to expand to other models. A terrific example is my sister who wanted a Wrangler to drive around with the top off and her golden lab in the front passenger seat. Fortunately, her wiser husband was able to convince her a Grand Cherokee would be way more practical (and reliable).
But the point remains: Jeep is locked into that lifestyle image, just like Harley, which has now fallen on hard times as their well-heeled market dies off. Younger people looking for a motorcycle certainly don’t want a product linked to such an older demographic.
What’s fascinating is how Subaru also appeals to a similar outdoor lifestyle, yet their products are way better built and enjoy an expanding market amongst younger buyers.
I can’t blame Stellantis too much for moving their products upmarket. Simply put, that’s where the biggest profits are found, and FSA’s previous efforts in the lower-profit vehicle categories have been dismal failures. You know, like the Dart.
So, yeah, so long, cheap Wranglers. I remember a time not that long ago when even A/C was optional on base Wranglers.
”Wrangler is almost always at the bottom of reliability rankings” : Strange that people buy this to go get lost in the middle of nowhere
with something that risks breaking where triple A doesn’t offer service. I would rather get lost in a Subaru even if it can’t go any deeper.
What is it about a Grand Cherokee that would make it more reliable than a Wrangler? This is the kind of thing that makes me question these type of “survey results”. They use the same engine, this generation of Wrangler has been built for longer than the GC, and there’s nothing I can think of in a Wrangler that is more complex than the equivalent system in the GC that would make it less “reliable” in absolute terms. I can see someone choosing a Toyota Highlander over a Jeep Grand Cherokee but not a GC over a Wrangler if reliability is the overriding concern. What am I missing here?
I can’t deny that all Jeep products, whatever the model, are more trouble prone than most. But the Wrangler seems to be the worst.
Virtually every other Jeep is of a design way more recent than the Wrangler, aka the old CJ series. AFAIK, the Wrangler still uses the same basic 1944 chassis that’s just been band-aided up throughout the decades to make it somewhat driveable on freeways. But it’s still not exactly the most safe (google ‘Wrangler death wobble’).
The Wrangler’s issue is everyone wants an off-road capable vehicle, and it’s the one area that the Wrangler ‘does’ excel in. It’s when it gets back onto pavement that the problems arise.
I always considered the Wrangler’s so-called issues akin to the issues with alcohol consumption – Yeah they’re real, but apart from those who suffer serious problems from it manage and simply don’t care. The Wrangler IS Jeep. Jeep wouldn’t last another decade if all they sold was the more practical more refined Grand Cherokee to carry the brand, because there’s 20 other automakers who have a more practical and more refined and better valued one of those too.
The wrangler is a lifestyle vehicle, complaining about its faults is akin to complaining the Mustang doesn’t have good winter traction or a Miata doesn’t have enough seats. Yeah… they’re sports cars. The Wrangler and more recently Bronco aren’t the do-everything SUVs, but what they do is exactly the reason the SUV carries a cool image, and that remains consistent, be it the current wrangler or a CJ5 in the 80s and prior. The Wrangler isn’t the source of Jeep’s current woes, it’s the rest of the lineup and/or management.
AFAIK, the Wrangler still uses the same basic 1944 chassis that’s just been band-aided up throughout the decades to make it somewhat driveable on freeways.
Not by a very long shot. There have been several generations of massive changes and evolution since the 1944 chassis. Yes, the Wrangler still uses solid axles, but so did the Range Rover and Mercedes G Wagen and others. But like them, they are now suspended on high-articulation coil spring suspensions front and rear, and the frames and tracks are vastly wider, and….
It’s like saying a current Chevy pickup is basically the same as a 1961 version. Lots of changes and refinement.
Stellantis don’t agree. Hoping to increase sales globally by 50% in the next few years. https://www.cnbc.com/2024/06/13/stellantis-jeep-sales-growth.html#:~:text=Through%20the%20first%20quarter%20of,Stellantis'%20U.S.%20sales%20in%202023.
Price escalation is where a lot of companies are at now. The Sloan “a car for every purse and purpose” philosophy has been replaced by continually inflating ATP and GP. Automakers say they don’t care about volume anymore, gladly abandon lower priced market segments, to inflate ATP and GP. The VAG CFO has openly said they don’t care about volume, and want to move the VW brand “upmarket”. Farley. at Ford, has said that he wants to exit the two row SUV market as there is “too much competition” in that segment.
The “reform” of the CAFE reg around 2006, has aided the growth in size and cost too. The “reform” switched from a sales weighted fleet average, to setting each vehicle’s MPG target according to that vehicle’s footprint. The new reg openly said the formula was skewed to make it harder for smaller vehicles to meet their targets, while giving larger vehicles and trucks, easier targets to meet. Subsequent administrations have followed the same route, doubling down on the built in bias of the formula. The Wiki article on CAFE includes comments by VW and Mercedes regarding the “reform”.
“Volkswagen does not endorse the proposal under discussion. It places an unfairly high burden on passenger cars, while allowing special compliance flexibility for heavier light trucks. Passenger cars would be required to achieve 5% annual improvements, and light trucks 3.5% annual improvements. The largest trucks carry almost no burden for the 2017–2020 timeframe, and are granted numerous ways to mathematically meet targets in the outlying years without significant real-world gains. The proposal encourages manufacturers and customers to shift toward larger, less efficient vehicles, defeating the goal of reduced greenhouse gas emissions.”
Daimler, producer of Mercedes-Benz brand automobiles, expressed similar views, saying it “clearly favors large SUVs and pickup trucks.”
Price inflation has been further aided and abetted by financing “reform”. Remember when cars were financed for 3 years? The average working person could not pay off a $50,000 car in that amount of time, so, to maintain “affordability”, financing can now be had for 7 or 8 years, keeping consumers farther in debt, longer.
Any reasonable person would say these trends are unsustainable, but the typical CEO doesn’t care. Like any other Ponzi scheme, the CEO plans on making his Millions, and retiring, before the scheme collapses.
Steve
Yeah, this. The CAFE “reform” is leading to the extinction of passenger cars much faster than emissions standards or electrification. It’s disastrous public policy, even more so than the relaxed standards for light trucks were in the first place.
You’re missing a key point here: these automakers you cite are leaving the smaller car market because they can’t compete effectively against the Asians. You think Toyota is going to abandon the 2-row SUV market and kill their best-selling RAV4? And Honda will do the same with the CRV?
Smaller cars (including sedans) are currently hot: Nissan’s Versa and Sentra sedans continued their hot year, each up over 40 percent in Q2, and the Honda Civic, Mazda 3, and Kia Forte are all doing well. Even the Mitsubishi Mirage saw a large sales jump. Other small sedans and cheap CUVs are also hot. Why?
It’s all 100% obvious: when interest rates were rock-bottom low, consumers could afford the payments for bigger cars/trucks, and so they did. They gorged on them, and the Big 3 made fantastic profits on those large vehicles. But interest rates are of course up now, and so they are buying smaller cars.
Ever since consumer auto financing became popular back in the 1930s or so, the key metric for a huge swath of American consumers is “how much of a payment can I afford, and what’s the biggest, fanciest, most prestigious or image-enhancing car that payment will get me?” That’s the overwhelming driver of the car market. And that’s what’s hurting Stellantis at the moment. Those high-priced Jeeps and Rams were flying off the lots two years ago with 3% car loan payments; not today.
Stellantis CEO Tavares has said that a $25k Jeep EV is a top priority. Will its actual ATP be $25k? probably not, but he fully realizes that the need to offer lower cars in the current high interest rate environment is essential.
Interest rates are by far and away the biggest factor in the automobile market, as in the housing market. We had an extraordinary long period of historically record low interest rates (too low, in my opinion, as they created many distortions in the economy, govt. finances and ultimately fueled inflation). But they explain the trajectory of the car market more than anything else.
Comparing base CJ5 prices from 1978 to a 2024 Wrangler is really not relevant. The CJ5 was a very crude vehicle, an update on the original WW2 Jeep. And why aren’t there more base Wranglers on dealer lots? Because folks aren’t buying them.
One last thought: it’s quite obvious to me that the majority of the CC readership leans older and more significantly, tends to be thrifty, or cheap. It doesn’t really make us very well suited to analyze the current market since it naturally is driven by manufacturers seeking the highest possible profit margin, which means selling the highest price cars possible to those folks either truly able to afford them or those that think they can afford the monthly payments. Let’s not forget that well over one-third of US households now make over $100k/year. And the stock market is at record highs. Many Americans feel flush; and those that don’t are now snapping up smaller and cheaper cars. And the Asian brands who stuck with smaller cars are happy to sell them to these buyers.
It’s all 100% obvious: when interest rates were rock-bottom low, consumers could afford the payments for bigger cars/trucks, and so they did. They gorged on them, and the Big 3 made fantastic profits on those large vehicles. But interest rates are of course up now, and so they are buying smaller cars.
Lets see if this comment makes it. The net has eaten my last two, about Stellantis moving engineering to Morocco.
Yes, the industry became addicted to the crack of suppressed interest rates. Traditionally, the non-recession prime rate was about 7-8%. Rates were beat down to half that during the 08-09 recession. Rates never really returned to normal after that, Then they were suppressed again during the plague. It has only been during the last couple years, that the prime rate returned to the 7-8% range.
I agree that people have been trained to only look at the monthly payment. Payment periods have been extended, from the traditional 3 years, to 7 or 8 years, to keep the monthly payment “affordable”.
But automakers have also been pushing the boundaries of ATP. Once they made Wall Street accustomed to seeing ever increasing ATP and GP, they did not leave a way for them to back out of that mode. So, now, GM and Ford abandon viable markets, to keep pushing those two metrics higher. GM recently dropped the Malibu, in spite of selling more Malibus than any other model except the Equinox and Silverado.
As before, other companies come in at the low end of the market, and build a base, from which to go after the big three’s core market. VW did it. Toyota and Datsun did it. Hyundai did it. The Chinese will do it too, unless the government gives GM and Ford more protection.
You demonstrated how the big three have lost buckets of market share some time ago. They will continue to lose market share, as they narrow their product line to only the most profitable offerings.
Let me preface this post as I write this as fan of Chrysler products.
Somehow, I believe the Jeep Curse will kill Stellantis. It’s managed to kill every other corporation that it’s been a part of, I don’t see why it won’t eventually cripple and kill Stellantis.
Stellantis is just the latest in a parade of foreign owners of Chrysler who are pimping the Jeep and Ram (RAM!) brands to prop up corporate profits. (See Daimler, Fiat, ca. 1998-2021). Tavares and PSA are going to be the death of the remainder of the legacy Chrysler brands. Tavares may be considered a miracle worker, but his method of working miracles is to cut costs, by any means necessary. Le Cost Cutter, Part Deux.
Jeep and Ram are propping up the sales right now, but all we need is some bad news in the economy and these $100K Grand Wagoneers and RAM TRXs are toast. There are many videos on YouTube describing the new, unsold Chrysler branded vehicles that are rotting on the sales floor. I don’t see how this will get better anytime soon. The cheapest Dodge (Hornet) is $31K and the Jeep (Compass) is above $25K MSRP. The cheapest Pacifica minivan is $40K? Actual on-the-lot pricing? That depends on the avarice of your local dealer.
Here in Michigan, there are plenty of rumors about what will happen to the Chrysler brands in the future. Many of the rumors are not good. But the fact is, Stellantis has fired many employees, both hourly and salary, in an attempt to bring costs down. If they were savvy, they would offset this bad news while announcing popular vehicles with lower starting prices. But, as long as people are willing to put up with the high prices, why should they bother?
Ha! My sentiments exactly. When I glanced at the header of the article, I immediately thought to myself that it might just be the other way around. Jeep is the auto businesses own Sirens of Homer’s Odyssey. It has lured and brought an end to every company that coveted and acquired it.
It seems to me that with every company moving up market there is a huge opportunity for someone to offer something like the original Jeep. Maybe the Mahindra Thar could be made compliant with US safety and emissions standards and imported. I’ll bet they could find a nice market at their likely price point.
https://en.wikipedia.org/wiki/Mahindra_Thar
How are we 18 comments and multiple hours into this post and a basic yet egregious math error hasn’t been noticed yet?
There’s a basic flaw in the sourced article – the reduction in sales in North America – 972k to 642k is NOT a 44% reduction. It’s a 34% reduction which isn’t great and a loss of 330k units but that’s an embarrassing flaw in the sourced article and makes one wonder a to its intent. In addition, Jeep is a worldwide brand (so some extent), there are a lot of sales not in North America.
The Renegade has been cancelled as of last year, but it was responsible for 97,000 units just in the US in 2018, the “good” year. It’s also brought the Jeep brand to lots of other people worldwide and cost almost nothing to build, since it was built in Italy on the underutilized Fiat 500X line. There’s always posers, everybody wants a Mustang GT convertible with the V8 and two girls perched on the folding soft top yet far more secretary specials were sold that just slog through the morning commute…The Wrangler is Jeep’s Mustang GT. It sells everything else.
The Compass sold a massive 171,000 units in 2018, it’s a core part of the brand, although it (like much of Stellantis’ product) is VERY long in the tooth and in need of updates. Yet that seems to be exactly what we here at CC celebrate, usually everything new is bad and Detroit never should have stopped selling the 1955 lineup…that would have solved all of their ensuing issues 🙂
The Cherokee has also been discontinued since over a year ago with just a couple of higher end trims still trickling out. In 2018 the Cherokee accounted for 239,000 units, can’t sell what you don’t have.
The Wrangler in 2018 had a highwater year as it was the last year of the JK and massive numbers were being pumped out before the switchover. We love our JK but the JL is a better car and worth more money, if not perhaps what is being asked for it currently. In the meantime the Gladiator has also been introduced which is really a Wrangler brand extension, encompassing all of the Wranglers strength and of course weaknesses. Take those two and add in the (even more) profitable Wagoneer/Grand Wagoneer models and the sales numbers total about the same 2023 vs 2018.
Wrangler and Gladiator are overpriced for what they are, yet Jeep is, for better or worse, an “aspirational” brand. A Grand Cherokee has WAY more brand cachet than a Dodge Durango, a Wrangler is the real deal if you are into offroad-ability. That’s worth something and people are generally willing to pay it, but a number of them are realizing they don’t have the credit or cash to do so anymore.
While a basic no-frills Wrangler would be nice in theory they would just end up going to rental fleets and clogging up lots. AC was optional until VERY recently, yet fitted to virtually every one. The old sticker is a fake “deal”, nobody wants it that way. There’s a reason the Rubicon sells as well as it does and it’s not because all of its buyers are taking them on the Rubicon Trail. It would outsell the mythical $25k manual transmission, rollup window, 2 door vinyl seat Wrangler without a top even if that were available. Dealers may be annoying but generally not stupid, there’s very good reasons why they don’t usually stock the most basic “sport” model, although specific custom orders have long been a very common thing for Wrangler with lead times quite short.
Wrangler sales really should have Gladiator sales lumped back in, a Gladiator buyer was likely a Wrangler buyer otherwise. Yet the Ford Bronco of course has taken a chunk of Wrangler intenders. The 392 is an absurd vehicle (yet I want to drive one), and should be priced as high as it is, anything to help stop regular morons from getting one and causing havoc, I can’t think of many ideas worse than a 6.4 Hemi in a short wheelbase, high center of gravity vehicle with poor regular road manners and even less reason why a 392 would be necessary offroad. Beyond of course the freedom to do so, which is perfectly valid and also validates the 100k sticker price, nobody is forcing anyone to buy one and I’m pretty sure they are the one model NOT sitting on a dealer lot somewhere being marked down.
I don’t think Jeep is in any trouble whatsoever beyond anything affecting the market as a whole. Their sales may be down but their profits are likely up vs 2018. There’s a ton of margin in ALL of their products to where if they wanted to they could easily drop prices, just like Dodge did on the Charger and Challenger, even at the current fire sale prices that two of our contributors took advantage of, Stellantis VERY likely still made a decent profit on those sales.
The viewpoint of getting rid of the “not really a Jeep” products is sort of coming true in the US at least for the most part, besides the Compass we are down to the Wrangler (and its variants including a pickup), a large body on frame SUV as well as one mid-size one in two lengths. Can’t really have it both ways, either offer and sell the “fake” Jeeps and juice the volume if the volume really matters, or pare it back to the “essentials” and price if that way, keeping the riff-raff out.
Thanks for the math check Jim – I’ve updated above and replaced the link with another source.
I think they have gotten too expensive for what they are, is the main problem. I would be very interested in a “stripper” CJ like the old days, but they don’t exist. Even a stripper Wrangler, if you can find one in stock (good luck with that), is too much coin to justify as a weekend/country house vehicle.
I know many suburbanite friends/co-workers who have bought a loaded up Wrangler for their everyday car….each keeps it for a year and gets something else. “It was fun, but too loud/crude/uses too much gas/hard to park/the novelty wore off” are the gist of their comments. Very few people need a Wrangler, it’s a luxury purchase these days and the market seems to be moving on the next cool thing, whatever that is.
My brother-in-law bought a base Wrangler (manual transmission, soft top, etc.) last year. He and his wife absolutely wanted it configured that way, and eventually ordered it from the factory, since there were none in stock anywhere near them.
I’m skeptical that a de-contented model would necessarily be more reliable. First, a “stripped-down” model in a modern sense is not and cannot really be all that stripped, for various practical reasons. For instance, base models no longer have roll-up windows because it would mean doing side impact tests more than once, and a dash with no touchscreen would likely require expensive tooling changes. And a lot of stuff like tire pressure monitors and such are mandatory.
Second, serious reliability problems don’t necessarily reside in the dispensable convenience features. (The strippo Volkswagen Rabbit my family owned in the ’80s and early ’90s had nothing other than a rear defroster — not even a radio — and it still managed to be a nightmarish garage queen.)
Third, even if it were commercially feasible to return to some system of cafeteria-style ordering, adding more production variations is not really a recipe for quality control on the line.
Fourth, and perhaps most seriously, Chrysler, and by extension Jeep, has a long and unhappy history of kneecapping appealing products (see for example the Neon and LH cars) by trying to squeeze out every last penny from stuff like lighting equipment and gaskets. As anyone aware of the Neon’s persistent exhaust system issues can see, this is not a recipe for improved reliability.
Beyond that, I’m not sure whether dealers would be keen on a base model with all the profits trimmed out, so such a Jeep might just end up making most of the same equipment a “mandatory option” that you can’t realistically skip.
So, I’m not sanguine about that.
Interesting comments, I hope Jeep survives, I doubt I’ll ever buy another .
-Nate
I’ve said elsewhere the cynicism in Stellantis management announcing their next attempt at an entry level EV branded a a Jeep is just heinous. People hated on me for suggesting if there were still some Chrysler Crossfires on the lot they’d try sticking 7-slot grilles on the front. As others note – Jeep has two problems, they took the core products WAY too upmarket coupled with attaching the flag-wrapped Jeep image to anything expecting the magic to rub off – and that’s like when GM put the ignition between the seats on a Blazer and a Subaru and proclaimed “Look everyone, the new Saab!!”
The time is ripe for someone to come along with a product like the original Suzuki Samurai. With all Jeep’s current issues, someone delivering the “Jeep image” at a bargain price would be dangerous.
An extremely good parallel is Mazda’s Miata. It’s not for everyone, it’s not practical, you have conform your life around it or have it as a 2nd vehicle, but it does what it does well. I bought an RF GT in Feb 2022 (not the BBS/Recaro package) with basically everything but the automatic transmission for $37K. And the Miata is still made in Japan, so you have labor costs and shipping involved. What Stellantis is doing with Wranglers – seems like that’d be like asking $70K for my Miata.
I suspect the new Ford Bronco is cutting in Jeep sales severely.
Stellantis defiles everything thy touch.
The “base Wrangler” still exists today, only it isn’t made by Jeep. The type of people (farmers, ranchers, hunters, etc) who bought the CJs for purpose now buy UTV, many from North American brands like Polaris and Can-Am. And in many of the locales where such a vehicle is legitimately useful, they can be licensed and plated for limited on-road use. Accounting for inflation, many models are actually *cheaper* (and just as capable) as a 1965 CJ5. Stellantis can’t compete.
I’ll throw in the galvanic corrosion issues plaguing the JL Wrangler and the Gladiator. People don’t like bubbling paint on $50,000 vehicles, and they like being stonewalled even less.
I think a lot of hard-core Jeepers do think that Renegades, Compasses etc have diluted the brand, but neither they nor I are real marketing experts. On the surface though, it does seem odd that there is essentially one each Chrysler and Dodge model (Pacifica and Hornet) but many Jeeps; why not kill Chrysler and Dodge and just make Jeep and RAM the North American Stellantis brands? One brand for light duty personal vehicles, and one for 1/2 ton and up commercial/HD vehicles. As far as I know all US/Canada Stellantis dealers sell all CDJR brands, so it’s not like needing to placate GMC dealers as well as Chevy dealers.
I did watch an interesting interview with Ford CEO Jim Farley recently, mostly about EV’s, and he seems to want to position Ford in two markets: commercial (F Series, Transit) and enthusiast (Mustang, Bronco), but also bring down prices in the latter category to broaden appeal and capture young buyers. I think Tavares is a capable CEO but Farley is more of a car guy, for good and bad 😀.
Hmm, this is the second time PSA have plucked Chrysler out of circling the drain, If Jeeps keep selling they likely will keep making them, I cant complain about PSA cars I’m on my 3rd in 17 years, gave one to my daughter it died due to lack of maintenance from a broke student last one was sold cheap because I found a newer model that hadnt done much mileage and its a great car. YMMV.
I can’t imagine Jeep going away. Ram is also a keeper. I take no satisfaction in saying this but I think Chrysler and Dodge are circling the drain. They deserved better.
I was pretty sure Dodge was doomed when the trucks split off the RAM brand.
Wrangler is a “different kind of Miata,” both are soft top with 6-speed manual, and uncompromising in their own way. They are priced not too far apart, base model to base model:
2024 MX-5 Miata Sport: $30,170
2024 Wrangler Sport: $33,890