Jeep is cutting prices in the US as new leaders change their strategy ahead of electric vehicle launches

Chestnut hills Jeep has cut prices across its range as part of a changed strategy under new brand leadership, after the automaker lost market share in the US and was about to launch its first all-electric vehicles in North America.

Jeep sales fell 6% in the United States in 2023. It faces increasing competition in niches it largely kept to itself for years, and with some of the most expensive vehicles in its segments, inflation and higher interest rates have deterred price-sensitive buyers. Quality issues challenged the results of its efforts 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 Friday, especially now that electric vehicles are on the way. The brand expects to start production of its first all-electric car in North America in the second quarter, which will be officially known as the Jeep Wagoneer S SUV as it ditches the Wagoneer subbrand. Deliveries could take place as early as the third quarter. The Jeep Recon off-roader could potentially hit the market before the end of the year. Stellantis did not say where these vehicles will be built in North America.

“We have to do something about market penetration and market share because this is not where this brand should be,” Filosa said during a roundtable with reporters at the automaker’s North American headquarters. “Brand perception is fantastic and we have research data that has never been stronger.”

Line-up changes affect approximately 90% of sales. Jeep has added more than $3,000 in content to the flagship Jeep Wrangler off-roader and to the redesigned ’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 following the launch of the Renegade, starts at $25,900 with a $2,500 lower MSRP. The Grand Cherokee, Jeep’s best-selling offering, is a whopping $4,000 lower, starting at $36,495.

“It’s a good first step,” Sam Abuelsamid, chief e-mobility analyst at market research firm Guidehouse Inc., said of the price drops. “They recognize that the price has risen too high. They need to bring that down.”

Jeep is facing increasing competition. Ford Motor Co. has entered the off-road space with the Bronco and Bronco Sport. EV startup Rivian Automotive Inc. has highlighted the off-road capabilities of its truck and SUV. Scout Motors Inc. wants to launch electric all-terrain vehicles soon.

“They suddenly have a lot more competition than they traditionally had,” Abuelsamid said of Jeep. “There is certainly an opportunity for them to increase their share, but it will not be easy.”

The price cuts come just after Stellantis CEO Carlos Tavares and Chief Financial Officer Natalie Knight said last week that 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 any major manufacturer.

Industrywide, the average monthly payment to purchase a new vehicle was $751, according to the Cox Automotive/Moody’s Analytics Vehicle Affordability Index. The typical interest rate on new vehicle loans was as high as 10.28%.

Filosa, who acquired Jeep from Christian Meunier late last year after running Stellantis in South America, said the Mexican-built Compass, which can be had for less than $26,000, is a value proposition for American families.

“We understand that inflation is such a raging wave for the world and also for the US,” he said. “We understood that step was important. Of course we are preparing: reducing costs, reducing industrial costs, improving efficiency. That’s the other part of the story.”

That includes identifying design changes, manufacturing process adjustments, logistics efficiencies and other areas, he said. Bill Peffer, Jeep’s new head of North America, declined at this time to specify whether automation would be included and what it could mean for jobs. The automaker has already implemented temporary and permanent job cuts at factories that produce Jeeps this year.

Jeep has also introduced a brand-specific quality and efficiency team to support these efforts and address issues as quickly as possible.

In addition to officially adding the Jeep name to the Wagoneer and Grand Wagoneer, because Jeep already appeals to luxury buyers, the brand is reducing the number of combinations and options.

“This,” he says, “provides more clarity around the brand, more clarity in the dealer’s showroom and more clarity of the offering to the consumer.”

To increase market share, Jeep is increasing its media spending, Filosa said, while Stellantis skipped the Chicago Auto Show and the Super Bowl. The emphasis will be on “high-impact” opportunities such as during the annual Easter Jeep Safari in Moab, Utah, Peffer said.

EVs could also be an opportunity to increase market share if the success of Jeep’s 4xe plug-in hybrid is any indication. The Wrangler and Grand Cherokee 4xes are the best-selling PHEVs in the United States, accounting for more than half of PHEV sales. Ninety percent of those customers, Filosa says, are conquests.

“We need these models to be with our consumers,” he said of the electric vehicles. “It’s a consumer-based strategy, not regulatory-based.”

In 2025, Jeep will launch five new models, including new nameplates. This ensures that the brand has an electrified option for each of its models. Filosa also said Jeep is exploring an application for a range-extending EV motor generator on sister brand Ram’s 1500 Ramcharger pickup, which will be available later this year. If so, the brand will need at least 18 months to launch a product with it.

The Wagoneer S will be Jeep’s fastest vehicle yet, with a 0-60 mph time of less than 3.5 seconds and 600 horsepower. It is the first vehicle to launch on Stellantis’ STLA Large platform and will compete in the largest U.S. segment alongside the Tesla Model Y, Ford Mustang Mach-E, Rivian R1S and others. A pre-production model showed off a vehicle packed with technology, including a head-up display and a passenger-side touchscreen.

“Our strategy follows the strategy of many other manufacturers as they introduce different powertrains and different technology into their products,” Peffer said. “They’re using their flagship, that’s what Wagoneer is. … We’re very excited about the equity that we have institutionally in the Wagoneer, regardless of the last couple of years or anything. That car has been around … going back over the years 60-plus years.”

bnoble@detroitnews.com

@BreanaCNoble

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