Jeep. It is one of the most-recognized brand names in the world, the kind that transcends the clutter and all but sells itself.
When a pair of German newcomers took over the reins of Chrysler Group in November 2000, their eyes lit up when they spoke of the promise of Jeep. They had to quell rumors the Chrysler Group would be dismantled, with all but Jeep sold, it being the brand with the most value.
From his first days on the job, Chrysler CEO Dieter Zetsche spoke of the need to polish the jewel that was Jeep and expand its reach.
A succession of Jeep concepts followed at auto shows the world over. Every January in Detroit, Zetsche repeated the mantra: Jeep's potential had yet to be realized — but it's coming.
Pieces of the Jeep strategy dribbled out over the years. At the 2002 North American International Auto Show, then-product development chief Richard Schaum, again let the genie out of the bottle, saying it was vital for Jeep to expand at both ends of its lineup, entry-level as well as high-end, raising expectations of a product onslaught to come.
“One entry-level (Jeep product) is not enough. I'm convinced you need two,” Schaum told Ward's at the time. “And we have other ideas, going up on the other end, where we think we can expand this brand, yet still be highly respective of its heritage.”
Unfortunately for Jeep, two years later, little has changed for one of the most revered SUV brands on the market. While Jeep's sister marques, Dodge and Chrysler, were getting all of the new-product attention; Jeep wasn't, even as it faced an army of new competitors from Hyundai to Hummer.
During the past 10 years, SUV sales have skyrocketed, and the market segment has turned into the industry's cash cow. But Jeep scarcely has moved a muscle to take advantage of the product niche it helped invent, adding only two new models to its lineup since it was acquired by Chrysler in a 1987 merger with American Motors — a period that saw the number of SUVs in the market more than double to 53.
From seemingly all angles, competitors new and old are encroaching on Jeep's turf. At the low end are SUVs and cross/utility vehicles priced as low as $18,500 from Hyundai Motor Co. Ltd., Kia Motors Corp. and Suzuki Motor Corp.
Swooping in from the high-end is Hummer, which has forged its rugged brand image (some say copied directly from Jeep) with the $106,000 H1 and $50,000 H2 and now is charging straight into Jeep territory with a new lineup of midsize, medium-priced H3 models.
In between are dozens of SUVs and CUVs big and small from the likes of Toyota Motor Corp., Honda Motor Co. Ltd., Nissan Motor Co. Ltd., BMW AG, Mercedes-Benz and Land Rover.
And then there are Jeep's traditional crosstown rivals, Ford Motor Co. and General Motors Corp.
Ford weathered the tire-related controversy surrounding its Explorer, the best-selling midsize SUV for 14 years running, and is introducing a hybrid version of its smaller Escape model in the fall. GM also has stepped up the pressure, adding its Chevy Equinox into the mix and pumping up incentives to as high as $5,000 on some of the SUVs in its broad lineup.
Jeep's complacency has taken a toll on its share, which has withered from 3.4% of the total light vehicle market in 1997, when it recorded sales of 472,872 units, to its current standing of 2.8%.
In terms of traditional SUV market share, Jeep's most recent high point came in 1993, when it controlled 29.6% of the segment. That's been slashed nearly in half, with the marque ending 2003 with a 15.4% share, according to Ward's data.
While Jeep sales have plunged nearly 21% from their recent peak of 554,466 units in 1999 to 440,559 units in 2003, sales of traditional SUVs have soared from 1.38 million units in 1993 (or 9.9% of the total market) to 2.9 million in 2003, accounting for 17.2% of the total market. Ironically, the SUV icon nearly was alone in its inability to capitalize on that trend.
That could be on the verge of changing, however. Jeep-brand sales have rebounded of late, thanks in part to higher incentives and torrid demand for the Wrangler, due largely to the introduction of the new Wrangler Unlimited model. Overall sales for the brand were up 10% in May to 41,765 units, while year-to-date deliveries, at 192,687 units, are running 15% ahead of like-2003.
But is it now too little, too late?
“It's taken too long to both add and refresh products,” Mike Wall, analyst with CSM Worldwide in Grand Rapids, MI, tells Ward's. “(DaimlerChrysler's) financial issues over the last few years dictated the slower cadence (of new products). It's true that the brand has been negatively affected by that.”
Executives admit the leadership at Chrysler, which underwent changes within the past three years as part of a massive restructuring plan, believed Jeep could withstand the period of neglect, while Chrysler and Dodge required more immediate help.
“If you've got one child that's doing well in school and seems very happy, and another child that maybe needs a little more attention, a little bit more TLC, where do you put your time as a parent?” says Jeff Bell, vice president of Jeep.
He adds: “Jeep has been so successful for so long, I think that attention was turned from a product-development and perhaps from a marketing standpoint more to the Dodge and Chrysler brands.”
Indeed, Chrysler and Dodge have reaped huge rewards of late when it comes to product-development investment. Chrysler launched its Pacifica CUV in 2003, while the Dodge brand rolled out its all-new Durango SUV. Earlier this year, the brands launched their most-awaited products, the rear-wheel-drive Dodge Magnum and Chrysler 300 Series passenger cars.
All the while, Jeep was finalizing designs for its '05 Jeep Grand Cherokee and preparing for the launch of its '04-1/2 Wrangler Unlimited, a stretched version of the popular World War II-era Jeep.
But the real benefits for Jeep won't come until at least 2006 or 2007, when a next-generation Wrangler and Liberty go into production in Toledo, OH, where for the first time a Jeep facility will be capable of building multiple models off more than one platform.
Jeep also will add a fullsize SUV to its lineup, a Grand Cherokee-based model dubbed Commander, in late 2005 or early 2006.
Toledo is slated to build two Wrangler-based models and two vehicles off the Liberty platform, sources say. There also are rumors of a Dodge version of the Liberty in the works, which won't do anything to bolster the Jeep brand directly but should help defray costs.
Zetsche confirms the bulk of Jeep's product renaissance will take place “in the timeframe of '06 or '07,” when the new models arrive.
“We are having a truckload of Jeep vehicles coming. Jeep is getting an over-proportional share of our long-range product plan (investment),” Zetsche tells Ward's.
Wes Brown, analyst with Iceology in Los Angeles, says, “Jeep is still strong enough overall from an image standpoint that they probably have a little bit more leeway in taking their time. But they still seem to be taking too long.”
Plans firmly are in place for Jeep to expand its product range in both larger and smaller vehicles, says product-development chief Eric Ridenour. He counters the question of why it is taking so long to bring new Jeep models to market by saying, “I would argue the other way, that if they are taking quite a while they must be getting close.”
One thing is certain: Jeep will not stray from its heritage. Says Ridenour: “We know what the Jeep brand is, where it has to head and what's important for it. It's just a tougher road.”