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Market trends: Jeep is finding the going tough

Jeep

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Review

A decade ago, Jeep was riding high in the UK. The original Cherokee, with its remarkably neat European styling, was a runaway success.

Dealers loved them. Jeep was rated as one of the three most desirable franchises.

It kept customer satisfaction high.

Happy customers meant good resale values which in turn kept dealers motivated – it was one big virtuous circle.

Since then, the situation has turned through 180 degrees. Dealers could not be more negative about Chrysler Jeep – the recent national dealer attitude survey not only rated them bottom of the industry, it gave it the lowest ever satisfaction score of 1.8 out of 10.

Customers have deserted them and resale values have nose-dived.

One large leasing company that has more than 60 Jeeps on its books said that examples now coming to the end of their leases are worth £1,700 less than forecast three years ago.

According to one guide, a Cherokee 2.8 buyer in 2005 could have expected to get 55% of its purchase price back at resale time – today the figure is 36%.

Now the man brought in to sort out the mess, Simon Elliott, has voted with his feet and left for Volkswagen.

For an objective view, we turned to Clive Sutton, once Jeep’s biggest UK dealer before he quit in 2004.

“The expansion of the range and the addition of the Dodge brand did not seem to be thought through.

It tried to bring in mediocre models to compete with volume brands rather than remaining in profitable niches. Jeep needs a Grand Cherokee at top, a Patriot at the bottom and the Wrangler as a traditional icon. Does it need anything else? Probably not.”

Certainly, the numbers suggest Sutton’s analysis is correct. Jeep alone has six model ranges – more than Land Rover – yet sells only 6,000 per year.

The Cherokee used to do 4,000 by itself. But that was when there were few family-sized SUVs to choose from.

The days when a four-wheel drive system and a Jeep badge would suffice are long gone. This also raises a wider question.

When Cerberus bought Chrysler Jeep from Daimler, it announced that the company’s future lay in international expansion – including Europe.

The scary thought raised by the current situation is whether the company should be doing exactly the opposite and return to selling only niche models over here.

Leaving cars unsold in Detroit is a lot cheaper than bringing them across the Atlantic to meet the same fate in Milton Keynes.

Will the Cherokee put Jeep on the road to recovery?

Jeep expects the new, higher-quality Cherokee to almost triple its annual registrations

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