Oh, what could have been…
Few brands were as well-placed as Jeep to capitalise on the rise and rise of SUV as Jeep. The American brand was all about SUVs, go-anywhere off-roaders are its core DNA and it has a reputation dating back decades. It should have been perfectly positioned to win over a legion of buyers either looking for adventure or just wanting to buy the idea of it.
It certainly looked promising there for a moment. In 2014 Jeep only narrowly missed out on finishing in the top 10 on the sales charts, selling more than 30,000 new vehicles. The Grand Cherokee was the most popular Large SUV, out-selling even the Toyota Prado, Toyota Kluger and Ford Territory.
Then came the fall, with sales dropping to just over 24,000 in 2015 and then plummeting to a little over 12,500 in 2016 and it has been in decline ever since. In 2024 Jeep sold just 2377 new vehicles in Australia, that’s a staggering 92 per cent sales decline in just over a decade.
And, to be fair to the team at Jeep Australia, this is not just a local problem. In the USA Jeep has endured six years of declining sales.
So what’s gone wrong? Why is a brand so synonymous with SUVs and adventure struggling to find buyers amid the overwhelming popularity of SUVs?
It’s not a simple answer, and someone will probably write a book on it someday, but looking at the big picture there’s an eerie similarity to what happened to Holden. Put simply, Jeep’s biggest success may have been the single greatest contributor to its downfall.
Those big years in ‘14 and ‘15 record sales for the Grand Cherokee, which was a very appealing SUV at time. It was affordable, spacious and well-equipped, unfortunately, it also turned out to have some build quality issues and over the span of the next few years more than a dozen recalls were issued for the Grand Cherokee.
Jeep management admitted at the time that it was not able to keep up with all the recalls and this put a strain on both the dealer network and irritated owners. Which is perfectly understandable, I think we’d all be annoyed having to book our car in for regular recalls, if it doesn’t cost us money the time and inconvenience undoubtedly soured many owner’s experience of Jeep.
This is where Jeep seemingly suffered a similar problem to Holden – it built up brand equity and a loyal customer base only to push it away. Holden did it via its decision to switch from largely European-sourced non-Commodore models to ones from South Korea’s Daewoo. It took decades of loyal, trusting Holden customers and drove them into the arms of Toyota, Mazda, Hyundai, Kia and others.
Jeep was simply not able to keep its Grand Cherokee customers in the brand, they left and bought something different. Retaining owners isn’t an easy task, but it’s easier than finding new customers, so the impact of the Grand Cherokee’s problematic period is no doubt a major factor in why Jeep finds itself in its current predicament.
The other major issue for the brand is where it has now positioned itself in the market. Those record Grand Cherokee sales occurred when the entry-level Laredo model started at $45,000 and the range-topping, V8-powered SRT cost $77,000. Fast forward to 2024 and the Grand Cherokee range begins at $65,450 and stretches all the way to more than $110k,
Sure, inflation has played a role in that, as has the shift in the market post-pandemic, but Jeep is also in control of its own price and positioning and has simply put itself in a difficult position. For similar, or even less, money to the Grand Cherokee buyers have the choice of Toyota Kluger, Hyundai Santa Fe, Hyundai Palisade, Kia Sorento, Isuzu MU-X, GWM Tank 500 and Ford Everest, so the competition is intense and convincing buyers to give Jeep another chance is extremely hard.
The challenge for Jeep is to somehow turn around its fortunes without suffering the same outcome as Holden – having the Australian outpost abandoned by its American overlords when the going gets too tough. How the brand does that feels impossible to answer, with no clear path back to the glory days sales numbers. In fact, just growing sales consistently year-on-year should be the medium-term goal, but it’s unlikely its planned electrified models will ultimately help.
Personally, I hope Jeep sticks around, it’s a great brand with a fantastic heritage, but it needs to do something radically different to get itself out of the precarious position it currently finds itself in. But if there’s any brand designed to get out of tricky situations, it’s Jeep.
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