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

Auburn Hills — 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%.

Filosa, who took over Jeep late last year from Christian Meunier after leading Stellantis in South America, said the Mexico-built Compass being available at less than $26,000 is a great value proposition for American families.

"We understand that inflation is such a raging wave for the world and the U.S. also," he said. "We understood that that move was important to do. Obviously, we are preparing ourself: cutting costs, reducing industrial cost, improving efficiencies. That's 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, the company's new head of Jeep in North America, declined to specify at this point if that would include automation and what it could mean for jobs. The automaker this year already has made temporary and permanent job reductions at plants that produce Jeeps.

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

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

"This," he said, "creates more clarity around the brand, more clarity in the showroom of the dealer and more clarity of the offer to the consumer."

Also to boost market share, Jeep is increasing its media spend, Filosa said, even as Stellantis skipped the Chicago Auto Show and the Super Bowl. The focus will be on "high-impact" opportunities such as at the annual Easter Jeep safari in Moab, Utah, Peffer said.

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

"We need those models to be along with our consumers," he said of the EVs. "It's a consumer-based strategy, not regulation-based."

In 2025, Jeep says, it will launch five new models, including new nameplates. That will ensure the brand has an electrified option for each of its models. Filosa also said Jeep is examining whether there is an application of an EV range-extending engine generator like that on sister brand Ram's 1500 Ramcharger pickup that's launching later this year. If there is, the brand would need at least 18 months to launch product with it.

The Wagoneer S will be Jeep's fastest vehicle to date with a 0-60 mph time in under 3.5 seconds and 600 horsepower. It's the first vehicle launching 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 vehicle loaded 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, different technology into their products," Peffer said. "They use their flagship, which is what Wagoneer is. ... We're really excited about the equity that we have institutionally in the Wagoneer, independent over the last few years or anything. That car's been around ... going back 60-plus years."

bnoble@detroitnews.com

@BreanaCNoble