Jeep’s precipitous decline lies at feet of those in executive suites, mansions
What’s wrong with Jeep? Nothing that better corporate leadership couldn’t have avoided.
Executives at Stellantis, the 3-year-old automaker that includes Jeep and the rest of the former Chrysler Group — Ram, Dodge and Chrysler — would be well-advised to keep that in mind as they strive to “fix” the stumbling cash cow.
The legendary SUV brand’s U.S. sales are off 9% through the first half of 2024. The decline accelerated to a disconcerting 19% in the second quarter.
The only surprise is it’s not worse. Jeep’s decline was entirely foreseeable. Inevitable.
I was second to none in hailing Fiat as a good match for Chrysler when the Italian automaker took over Chrysler after the Great Recession, but 2024’s issues at Jeep — and the Ram truck brand — flow from Fiat leadership’s one glaring weakness: Its answer to every challenge was to delay investment, prolonging production of sagging vehicles.
What’d they expect?
Fiat’s primary brands — Fiat, Lancia and Alfa Romeo — spent decades in slow retreat as management extended the lifespans of flagging vehicles rather than inventing and investing to put superior new ones on the road.
You can argue the strategy kept the brands alive by scrimping on investments and hoarding cash. True, but it’s a truism you can’t cut your way to growth.
Those old-line Fiat brands still exist, but Alfa is an afterthought among luxury brands. Lancia only sells cars in Italy. Fiat is Stellantis’ No. 1 seller on the strength of its presence in Italy, Turkey and South America, but its lineup is a shadow of the range of vehicles it once sold.
That history notwithstanding, Fiat Chrysler management starved Jeep of new vehicles over the last decade to funnel billions into new Alfa Romeos — money earned largely by Jeep and Ram sales.
Those Alfas — the Giulia sport sedan and Stelvio SUV — are lovely to look at and fun to drive. But they generated a small fraction of the sales and profits that could’ve been expected from competitive new Jeeps.
While management splurged on vanity projects for Alfa — a onetime icon of Italian automaking — two core Jeep models were starved for investment, and a lesser, but popular one left the lineup.
A good new car beats a good old one
The Jeep Compass and Cherokee accounted for 37% of Jeep U.S. sales in 2019, the last year of pre-pandemic sales, according to registration figures from S&P Global Mobility.
Jeep ended Cherokee production in 2023.
The Cherokee racked up 1.5 million sales from its return to Jeep’s lineup as a 2014 model till end of production.
That’s despite the fact that the Cherokee on sale in 2023 had the same platform, interior size and basic engineering as when the model debuted in 2013.
Story continues
That’s ancient in automotive terms. Competitors like the Toyota RAV4 and Honda CR-V were replaced with new models at least once, some twice, in that period.
In 2023, Stellantis also pulled the plug on U.S. sales of the subcompact Jeep Renegade — not a core vehicle, but one that topped 100,000 sales twice in its 10-year run.
The Compass, which debuted way back in 2006, is still in production. Its 2023 sales were 34.5% down from 2019.
It’s among the oldest vehicles in its segment. The 2024 model year brought good interior and infotainment upgrades, but you can only do so much when major competitors offer newer platforms, designs and powertrains, including several hybrids.
2017 Jeep Compass Trailhawk
Fiat Chrysler’s expensive bet on reviving the Wagoneer and Grand Wagoneer models has yet to pay off. The big SUVs should do well in the long run, though.
Bottom line: Since 2019, Jeep dropped its third bestselling vehicle, let No. 4 age toward irrelevance and dropped No. 5, the Renegade.
Its 2023 U.S. sales were 31.2% down from before the pandemic.
Facing strong new competition in segments Fiat Chrysler and Stellantis either abandoned or underfunded, it’s a wonder things aren’t worse.
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More: Sterling Heights UAW rally demands Stellantis stick to timetable for Belvidere plant
A chance ahead
Will Stellantis continue to starve its cash cow? There’s reason for hope as well as cause for concern.
Peugeot SA — or PSA, the French-based company that merged with Fiat Chrysler to create Stellantis, was a strong player in Europe’s intensely competitive auto market.
Peugeot vehicles did well in France and Germany. PSA’s relatively new DS brand carved out a small, upscale niche. Some of DS’s success may have come at the expense of Citroën, but that brand — creator of two long-running French icons, the 1948-’90 2CV and 1955-’75 DS — soldiers on with an array of quirky models.
PSA only had to manage a few brands, though. Its stable has grown madly in the last decade, starting with the acquisition of Opel and Vauxhall from General Motors. Early returns were promising as the brands’ performance improved.
Carlos Tavares, CEO of Stellantis, talks with investors at the company amphitheater during Stellantis Investor Day at their corporate headquarters in Auburn Hills on Thursday, June 13, 2024.
Managing the 14 brands that constitute Stellantis is much more challenging.
When Stellantis was created in 2021, CEO Carlos Tavares promised each brand had a decade to prove it deserved to survive.
That staved off outcry from traditionalists, history buffs and unions.
It also created a Rubik’s Cube of investment challenges.
Stellantis needs to solve its Jeep puzzle quickly.
On top of problems created by previous management, there’s deep concern in Auburn Hills over whether European-engineered vehicle architectures will deliver the performance Jeep owners demand. Corporate enthusiasm for moving engineering work to low-cost countries with no history of automotive expertise only exacerbates the morale problem.
Jeep should always have been a priority.
It must be one now.
Whoever has the gold makes the rules
Responsibility for Jeep’s precipitous decrease lies at the feet of people living in mansions in West Bloomfield, Turin, Italy, and Paris, not plant and tech center employees in Michigan, Illinois and Ohio.
Employees are paying for miscalculations by executives who pursued the unicorn of an Alfa Romeo hit rather than supporting the brands that paid for their villas and lake houses.
Destiny Davis, right, a member of UAW Local 1700 and a worker at the Stellantis Sterling Heights Assembly plant on Van Dyke Avenue in Sterling Heights joins with others on Friday, Aug. 23, 2024, for a rally. They all stood in front of the plant calling on Stellantis to honor the union contract and the Keep The Promise campaign to maintain product and investment commitments in Belvidere, Illinois, and across the country.
Rising tensions over layoffs and investment and production delays from what the company promised in contract negotiations a year ago aren’t helping.
Tavares doesn’t have a time machine, but a little openness could go a long way here. It was the executive suite, not the hourly workers, engineers and designers, that got Jeep into this mess.
Leadership should share in the pain of getting out of this mess.
More input from the people who develop and build Jeeps and Rams couldn’t hurt, either.
Contact Mark Phelan: 313-222-6731 or [email protected]. Follow him on Twitter @mark_phelan. Read more on autos and sign up for our autos newsletter. Become a subscriber.
This article originally appeared on Detroit Free Press: Jeep should’ve been a priority for Stellantis — and has to be now
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