Jeep - Lost in the Rubicon?
Ah, those were heady days back in 1998. The Ego Maniac, Juergen Schrempp, was giving interviews and waxing lyrical about the "merger" of Daimler Benz AG and Chrysler. His favorite brand was Jeep. He even had a couple Wranglers flown over to Germany so he and his kids could have fun with them. It was clear that Jeep was a very valuable part of the acquisition.
Jeep was the bright spot of the old American Motors Corporation and probably what kept it alive as long as it was. When Chrysler purchased AMC, the only asset of value was Jeep and it soldered along as a true American icon, true to its WWII roots and its four-wheel drive heritage. In the 1980s, the Jeep Cherokee was one of the pioneers of the present-day SUV craze. There was a time when the Jeep Grand Cherokee was on the short list of luxury SUVs buyers. The big Grand Wagoneer was the choice for a large, well-equipped wagon to fit a large family.
But that was then, this is now. Jeep's only new product in the past 6 years has been the Liberty, which was in development at the time DCX was created. The Liberty has been a hit and still sells well. For the first six months of 2004, Liberty sales are up 10% almost to the level of the Grand Cherokee. DCX hopes that a Liberty facelift will be enough to boost sales over 100,000 units. The Liberty also gets a 2.8L common rail diesel engine, which probably won't be available in California. I hope it is offered here because it's rated as a truck; however, it may still fail California standards.
The Grand Cherokee receives a full redesign this year and will be in the showrooms by the end of October. I've seen the Grand Cherokee running around LA in minimal disguise. The new design is a bit fresher but it doesn't really catch the imagination like the Chrysler 300 or Dodge Magnum. Mercifully, Jeep hasn't given in to the pressure to match other SUVs in the size and price range with a third seat row. It's been my experience that only small children could fit in those seats and that third-row duty was best left to a more spacious minivan. The new Grand Cherokee is a bit longer and wider, but those won't be big selling points. The big selling point will be the addition of the 5.7L Hemi V8 that is doing duty in many other Chrysler Group products.
The Hemi "aura" has sold very well to the American market. We still romanticize the golden era of the muscle cars with style. It's almost like comfort food in the form of an engine. The Jeep version of the engine is still the same pushrod low-tech V8; but like the Hemi engine in the Magnum R/T and 300C, cylinder deactivation is the standard engine management system. It's the first time this type of engine management has been offered in an SUV. I'm not sure just how much gas mileage gains really occur in daily driving, but for buyers feeling a bit guilty about buying another huge SUV with a gas-guzzling engine, the cylinder deactivation feature might assuage some of the guilt.
There has always been a place for the Grand Cherokee in the SUV market, but with a good advertising campaign, Jeep may be able to pick up some lost market share.
Jeep also has plans for a spiritual successor to the Wagoneer. The Commander was shown as a concept car in Detroit last year (of course, we don't get concept cars like this in LA) and it was well enough received to ensure production. Now the question is whether the SUV market will still be as hot in 2005 even as it cools a bit today? I don't know that answer; but the trend here in LA seems to be moving away from the Monster H2 to something a bit more politically correct like the new Lexus RX hybrid. I'm a bit more cynical - I think that people will continue to buy these huge trucks, even if they have to keep a Toyota Prius in the garage for some public appearances.
The Commander is a large, seven-seat, hopped-up on steroids station wagon built on a stretched Grand Cherokee platform. It will slot above the Grand Cherokee as Jeep's top-of-the-line civilized off-road family hauler. Of course, as with the vast majority of SUVs, it will never see off-road duty -- all it has to do is look like it would do anything.
But is there a market for a Jeep this big and expensive? A Grand Cherokee already stickers for $40k, but your local Jeep dealer will happily discount that heavily. The Commander will easily top $50k. The competition is the Lincoln Navigator, GMC Yukon XL and the Cadillac Escalade ESV and maybe the Hummer H2. Let's look at the prices for these behemoths:
The Caddy tops the group with a $70k price tag. I think your local Cadillac dealer will "work" with you on that price. Next, the Navigator, can hit $65K, but Ford will give back at least $5,000 on that price. The Yukon Denali XL (a loaded Chevy Suburban) is "only" around $56k, but again, GM will pay you at least $5,000 if you would please take it out of your dealer's inventory. The H2 is at least $60k and is another Chevy truck (a Tahoe) that has been dressed up. There has been discounting now that the H2 isn't as unique or popular and GM has some nice spiffs to help you make the decision to get one of these monsters.
If the Commander is nice enough and priced a bit more competitively than these dressed up basic trucks, it might find a niche with the husbands of soccer moms who refuse to drive, let alone be seen in a minivan. I only have one request for Jeep's Commander. It would be really nice if this beast had the same tailgate as the Wagoneer. The Wagoneer had a real, heavy, carpeted, fold down tailgate with a frameless power rear window. It is one of the most endearing qualities of a big wagon and it's been missing on an American product for many years. Your Golden Retriever will thank you if you lower the window just a bit for him to smell the fresh air.
The last product is the one I'm most concerned about. A few years ago, Jeep showed a very cool concept car called the Compass. It was a wildly fun show car and I really liked it. Now here the rub -- Jeep is supposed to jointly develop a front drive platform with Mitsubishi for the Compass which is supposed to be an entry level (read: cheap) Jeep. I assume that means that the venerable Wrangler isn't considered "entry level" even though you can get a stripped one for $15k.
These days, just about anything associated with Mitsubishi is poison. Mitsubishi is the scorned Japanese affiliate of DCX and it produces unremarkable product that doesn't sell well without huge incentives or low financing. Mitsubishi just upped its warranty to 10 years in a desperate move to reassure customers.
But a front drive Jeep just seems wrong. There is nothing rugged about a small front drive coupe with some Jeep styling. Image is very important for Jeep as it has a very strong brand image that shouldn't be neglected or squandered [any longer].
Jeep's Wrangler is the only product I really didn't talk about. However, I'm not worried about the Wrangler as it seems to have a loyal following of fanatics all over the country. I can see the logic of leaving it alone since it's such an icon that people will continue buy it no matter how uncomfortable and impractical it is.
Overall, I think Jeep may have been lost in the Rubicon, but it found its way out and with new product and good marketing, Jeep should be able to reemerge as a more aggressive player in the SUV market it helped create.
