Jeep is seeking its own piece of the SUV luxury market
The Jeep brand, a pioneer of the modern sport-utility vehicle, has long missed out on one of its most lucrative segments. Not anymore.
Fiat Chrysler Automobiles NV, which merged with French rival PSA Group to become Stellantis NV in January, is debuting three large Jeep SUVs this year, crowned by the Grand Wagoneer, a land yacht that tops out at $111,000 when fully loaded.
The Grand Wagoneer, and its more affordable sibling the Wagoneer, are a shot across the bow at General Motors Co., whose Chevrolet Tahoe, GMC Yukon and glitzy Cadillac Escalade have helped it command more than 50% of the U.S. three-row SUV market for years. The Jeep SUVs will be available in dealerships this summer.
“Sales in that segment are still dominated by GM, that’s really what they’re looking at,” said Stephanie Brinley, an analyst with IHS Markit. “I’m optimistic they’ll be able to get enough of the Grand Wagoneer buyers to make that a success for them.”
The product onslaught is the work of Fiat Chrysler, long the scrappy underdog of Detroit’s three automakers, which is poised to benefit from gains in scale and resources from the merger with PSA. It comes as Chief Executive Officer Carlos Tavares takes the reins of Stellantis. Key to his mission will be a successful expansion of the Jeep brand, a coveted marque that provided the lion’s share of profit for Fiat Chrysler, along with the Ram pickup franchise.
Besides the Wagoneer and Grand Wagoneer, Jeep is adding a three-row version of its Grand Cherokee SUV, filling a hole in its lineup that has cost it sales for years. The Grand Cherokee was the top-selling Jeep in 2020, with nearly 210,000 U.S. deliveries.
The return of the Jeep Wagoneer, which first debuted in 1962 and ceased production in 1991, will allow Jeep to re-enter a segment expected to grow more than 50% in the next three years to nearly 450,000 vehicles, according to LMC Automotive. The average transaction price for large SUVs has risen 16% since 2015 to $68,405, and 17% for large luxury SUVs to $98,949 this year, according to researcher Edmunds.
The new offerings from Stellantis could further erode GM’s dominance of the large SUV market, which slipped to 53% in 2021 from 62% in 2016. Meanwhile, Ford Motor Co. grew its share to 20% from 13% in the same period, thanks to the Ford Expedition and popular Lincoln Navigator, according to Edmunds.
“These vehicles are massively important for revenue and profitability,” Brinley said. “They need to focus on profitable volume rather than volume for volume’s sake.”
Stellantis will produce about 11,000 Jeep Wagoneers this year and 53,000 in 2022, while increasing the number of Grand Cherokees it makes to 260,000 next year, according to LMC.
The twin Wagoneers are more than just a new model launch for Jeep. They’re an ambitious step for a rugged brand known for muddy off-roading into the rarefied air of luxury vehicles.
The Wagoneer starts at $57,995 and the Grand Wagoneer starts at $86,995. Extravagant amenities account for the eye-popping $30,000 price difference: Palermo quilted leather-trimmed seats, passenger and rear-seat screens, Amazon Fire TV, and McIntosh speakers. The trucks will also offer “hands-free” driving assist features, though executives declined to give specifics.
The models signal an evolution “into something totally new, like a brand within a brand,” Christian Meunier, global head of Jeep, said in a virtual press conference last week. “This product is meant to build memories,” he said. “It’s meant to be, at one point of time, full of mud.”
Jeep is trying to thread the needle with its off-roading personality and classy new frills. While a Wagoneer can’t climb a rock at Moab, its all-wheel drive package comes with flexible suspension that offers 10 inches of ground clearance and 10,000 pounds of towing capacity, Jim Morrison, the head of the Jeep brand in North America, said last week.
It’s also leaning on the nostalgia of the original Jeep Wagoneer, whose signature wood-paneled siding is buried in the American consciousness. The Wagoneer is built on a new car platform designed for gas, hybrid or electric powertrains and will serve as the luxury benchmark for the brand.
“Jeep has never been a luxury brand, and competing against the luxury brands or premium brands is not an easy thing,” said Felipe Munoz, an analyst at Jato Dynamics, a research service focused on the auto industry. “So we’ll see how they do.”