Renegade production for US begins in firstquarter 2015

Renegade production for U.S. begins in first-quarter 2015.

Jeep Renegade Adds to Growing Small CUV Segment

Popularity of this new breed of vehicles is growing rapidly worldwide, and more automakers are beginning to test the U.S. market, where buyers are expected to migrate from small hatchbacks and sedans.

NEW YORK – Assembly of the ’15 Jeep Renegade will begin in the fourth quarter at Fiat Chrysler Automobiles’ Melfi, Italy, plant, Jim Morrison, director-Jeep brand marketing, says at a recent press conference here.

However, initial volumes will be earmarked for the European market, and Melfi won't start producing Renegades for the U.S. until first-quarter 2015. The Renegade, which will be the first Jeep sold in the U.S. that is built abroad, will join a growing segment of new-generation, fuel-efficient CUVs on the market.

Popularity of this new breed is growing rapidly worldwide. More and more automakers are beginning to test the market here, as well, with new entries from Jeep, Chevrolet and Honda currently making the big headlines.

However, don't look for these smaller CUVs to be built in the U.S., where the business case for the lower-margin models has been a tough one for OEMs to solve.

Melfi currently assembles the B-segment Fiat Punto and, in addition to the Renegade, will begin producing the Fiat 500X before year’s end.

The Renegade will compete with the Nissan Juke and Kia Soul, both already on sale in the U.S., as well as the Honda Fit-based HR-V scheduled to debut next winter and Chevrolet Trax due Jan. 15.

There also are three premium small CUVs offered here: the Buick Encore, BMW X1 and Mercedes-Benz GLK. Mercedes plans to introduce an even smaller model, the GLA, in the U.S. in September. An AMG version of the GLA will launch next year and feature a 355-hp engine.

The Trax-based Encore, with base prices ranging from $25,000 to $31,000, comes to U.S. Buick dealers from a plant in South Korea. Since its launch in January 2013 sales have skyrocketed, rising 93% in first-half 2014.

Prices for the Renegade haven't been announced, but it will be available in four trim levels. The base model Sport, as well as the next grade up, the Latitude, has a 1.4L 4-cyl. turbocharged engine that generates 160 hp and 184 lb.-ft. (249 Nm) of torque. The engine is mated to a 6-speed manual transmission exclusively.

The more expensive Limited and Trailhawk models feature a 2.4L 4-cyl. cranking out 184 hp and 177 lb.-ft. (240 Nm) of torque. These versions will be available only with a 9-speed automatic transmission developed with ZF and built in Chrysler's Kokomo, IN, plant. Morrison forecasts about 70% of Renegade buyers will select the model with the bigger engine.

A Jeep spokesman says the Renegade's price “will be competitive in the segment.”

The Juke, built in Nissan's Oppama, Japan, plant, bases at $19,170, but its top of the line NISMO RS model hits $28,120. Juke U.S. sales through June totaled 25,761 units, an increase of nearly 45% over like-2013. Only 15% of Juke sales are in the U.S., a Nissan spokesman tells WardsAuto.

In addition to the U.S. and Japan, the Juke is offered in Mexico and Canada, much of Latin America, Korea, New Zealand, Australia, Thailand, Taiwan, South Africa, Europe including Russia, and in the Middle East and Africa. The Juke is not sold in China.

Segment 2.7 Million and Growing

The Trax currently is available in Canada and Mexico, so its arrival in the U.S. will see an already market-tested vehicle. A diesel engine, offered in some markets, won’t be available in the U.S. version.

Initially, the Trax will be imported from South Korea, where the Buick Encore also is built. But eventually the U.S.-market model also will be sourced from a Mexican plant. Prices will start at about $20,000.

A Honda spokesman says the HR-V will be the brand's new entry point to its light-truck portfolio, “positioned below CR-V in both price and size.” The HR-V will be assembled at a Honda plant in Mexico on the same line as the subcompact Fit.

Ford also has a model in this segment, the Brazil-built EcoSport, but there’s currently no plan to bring that vehicle to the U.S. The EcoSport is the market leader in Brazil, a Ford spokesman tells WardsAuto in an email, with a 30.6 % segment share on a volume of 4,591 units so far this year.

Ford will sell the EcoSport in Europe and plans to launch the model in Thailand, Japan and Australia this year.

WardsAuto data indicates additional models are on the way, including the Infiniti QX30 and a new entry from Nissan, both likely to be sourced from Mexico. The Fiat 500X arrives in the U.S. next year. Overall U.S. sales of Small CUVs, a WardsAuto segmentation that includes larger models such as the Hyundai Tucson and Jeep Patriot, are up 24.2% for first-half 2014.

Jeep CEO Mike Manley noted earlier this year that B-segment CUV sales already total 2.7 million units annually worldwide, including 1.1 million each in Europe and the Asia-Pacific region and about 250,000 in the U.S., where Chrysler expects volume to grow as buyers migrate from small hatchbacks and sedans.

“This is a very important segment to us,” he said.

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