Jeep may have missed the boat on a three-row SUV.
Jeep desperately needs a three-row SUV to compete with the likes of Ford, Chevy, and other automakers who have established products in the segment. Fiat Chrysler Automobiles CEO Sergio Marchionne has been beating the drum for such a vehicle since 2014, and still, dealerships are waiting for such a vehicle. When Jeep announced its five-year plan earlier this month, there were two three-row offerings on the docket – the Grand Wagoneer and a possible three-row Grand Cherokee. However, while SUVs are still selling well, a confluence of factors may already spell disaster for the future product.
John Murphy, a research analyst at Bank of America Merrill Lynch, told the Automotive Press Association in Detroit that the next five years will be a challenger for automakers. Murphy cited higher interest rates, lower used-car values, increased fuel prices, reduced U.S. vehicle sales, and increased raw materials costs leading to a difficult time for dealers that want to sell high-priced vehicles, according to Automotive News.
"I think our window of opportunity is closing," a longtime FCA dealer told the industry publication, speaking on condition of anonymity. "We could have killed with [the Grand Wagoneer] if it had been available when they first told us about it, but it's a much tougher sell with interest rates and gas prices going up.”
Indecision at FCA has likely caused the Grand Wagoneer’s delay. In late 2016, FCA planned the Grand Wagoneer to be a luxury, six-figure unibody SUV that would compete with the Land Rover's Range Rover, according to Automotive News. However, just months later in early 2017, Marchionne said the automaker would transform the Wagoneer and Grand Wagoneer into body-on-frame vehicles. This was to better compete with large three-row SUVs from domestic rivals GM and Ford.
"The Grand Wagoneer will still sell because it's a Jeep," a second FCA dealer told Automotive News. "But it would have been nice to have them already.”
While Jeep is still planning on the Grand Wagoneer, it’s not clear when production will begin. The new Jeep is supposed to be built at FCA's Warren Truck Assembly Plant, but the factory is currently producing the previous-generation Ram 1500, which it will do through the end of the year, possibly continuing into 2019. This could delay the Grand Wagoneer further to late 2019 or even 2020. And by then, the entire automotive landscape could change.
Source: Automotive News