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Jeep cuts US pricing as new leaders alter strategy ahead of EV launches

Breana Noble, The Detroit News on

Published in Automotive News

AUBURN HILLS, Michigan — Jeep has cut pricing on its lineup as a part of an altered strategy under new brand leadership after the automaker bled U.S. market share and is set to launch its first all-electric vehicles in North America.

Jeep sales declined 6% in 2023 in the United States. It’s facing increasing competition in niches that for years it had held mostly to itself, and with some of the highest-priced vehicles in its segments, inflation and higher interest rates has dissuaded price-sensitive buyers. Quality issues challenged results of its effort to expand market coverage and introduce a sub-brand with the full-size Wagoneer SUVs.

A correction is warranted, Antonio Filsosa, the brand’s new CEO, said on Friday, especially with EVs coming. The brand expects to start production of its first all-electric vehicle in North America, which officially will be known as the Jeep Wagoneer S SUV as its abandons the Wagoneer sub-branding, in the second quarter for deliveries as early as the third quarter. The Jeep Recon off-roader potentially could launch before the end of the year. Stellantis hasn't said where those vehicles will be built in North America.

"We need to do something on market penetration and market share, because it's not where this brand deserves to be," Filosa said during a roundtable with reporters at the automaker's North American headquarters. "The perception of the brand is fantastic, and we have survey data that never has been so strong."

Lineup adjustments affect about 90% of its sales. Jeep has added more than $3,000 in content to the flagship Jeep Wrangler off-roader as well as the refreshed ’24 Gladiator midsize pickup, whose manufacturer’s suggested retail price is $1,700 lower this week starting at $38,990. The Jeep Compass crossover, now the brand’s entry-level model in the United States after discontinuing the Renegade in the market, starts at $25,900 with a $2,500 lower MSRP. The Grand Cherokee, Jeep’s best-selling offering, is as much as $4,000 lower starting at $36,495.

"It's a good first step," Sam Abuelsamid, principal e-mobility analyst at market research firm Guidehouse Inc., said about the price drops. "They recognize they went too high up in price. They need to bring that down."

 

Jeep is facing increased competition. Ford Motor Co. has entered the off-road space with the Bronco and Bronco Sport. EV startup Rivian Automotive Inc. has emphasized off-road capability of its truck and SUV. Scout Motors Inc. is looking to launch electric off-roading vehicles soon.

"They've suddenly got a lot more competition than they traditionally have had," Abuelsamid said of Jeep. "There's certainly opportunity for them to grow their share, but it's not going to be easy."

The price cuts come just after last week Stellantis CEO Carlos Tavares and Chief Financial Officer Natalie Knight said the company would remain “disciplined” on pricing to ensure cash flow for the investments to make the transition to electrified vehicles. Stellantis’ average transaction price of $53,300 last year was the highest of major manufacturers.

Across the industry, the average monthly payment on a new vehicle purchase was $751, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index. The typical new-vehicle loan interest rate was a whopping 10.28%.

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