After a series of steep price increases over several months, American off-road specialist Jeep says it remains committed to Australia, even if sales are only a fraction of its target of reaching 50,000 a year – and less than a third of its previous record.
Jeep global boss Christian Meunier says the American off-road specialist remains committed to Australia – and right-hand drive markets around the world – even as the company sells vehicles at a fraction of the rate which it foreshadowed three years ago and well below its previous local record.
The top Jeep executive also defended the string of steep price increases over the past 12 months – including on vehicles that hadn’t gained additional equipment – insisting the company was not profiting, but instead passed on higher production and logistics costs, like many others. automakers have.
Asked about Jeep Australia’s recent sales results of around 7,000-8,000 vehicles per year – against the backdrop of a stated goal of reaching 50,000 per year, significantly higher than the record of 30,000 set in 2014 – Mr Meunier told Australian media at the Detroit Vehicle Show:
“So what we’re doing in Australia is trying to get the Jeep business back on track. The last time I was in Australia…I think there was a lot of good energy and then ‘ boom…a month later, everything closed (due to COVID-19).
“Today I think we are doing a lot better than before. Obviously there were some semiconductor issues (and a) shortage of Wranglers. Grand Cherokee was supposed to launch earlier (but) it has been delayed. So a lot of logistical issues.”
When asked if Jeep Australia’s sales ambition of 50,000 vehicles per year – the goal announced without a specific deadline by Mr Meunier at the end of 2019, during a media preview of the Jeep Gladiator pickup in New Zealand – was too ambitious, the executive said:
“I think we’re going to sell around 8,000 (vehicles in Australia) this year, that’s not really what I think is a good number for Jeep. You know what my projection was (50,000) and I still think that We can do it.
“I think we’re doing better, much better than before. I think we’ve changed a lot of things. I think the dealer engagement is better. The positive thinking is there.”
When asked if Jeep headquarters were still lagging behind in the Australian market, Mr Meunier replied: “Ccompletely, completely. The right-hand drive strategy is clear. You know, we are investing for Japan, Australia, New Zealand… South Africa is now becoming quite a serious market for us.“
However, Meunier noted, not all right-hand drive markets were successful.
“The UK is a struggle. I’m not going to deny that the UK has been a struggle for a while. We didn’t have the right cars, we were importing the Compass from India at the time, but the UK is more European, all the connectivity and everything is more European.
“So now we have made the decision to get a European car from…Italy, which will be a good asset.”
Asked if Jeep Australia’s recent price increases were driven by profit or rising costs, Mr Meunier replied: “Raw materials, inflation and all. Obviously we had some recovery prices to be made on the (profitable) margin.”
Then, in a response that appeared to be at odds with the stated sales target of 50,000 vehicles a year, Mr Meunier said: “I think one of the reasons Australia was really struggling is ( only) volume hunting.
“They were looking for volume and not hitting it. They were pushing metal. They weren’t brand driven. We’re not making a lot of money, the dealers weren’t making money, and that’s the vicious circle.
“What we’ve done is we’ve stopped all those entry versions…we’ve enriched the portfolio, we’ve made it more premium. So we have a well-equipped product. We’re not going after the Koreans, we’re not chasing Chinese. We’re not a mobility brand, we’re not selling transportation. We’re selling adventure.
When asked to elaborate on whether it was still possible to increase sales and profits at the same time, Meunier said:
“The prices you have in Australia are pretty consistent with what we have in Japan or what we have in Europe or North America.”
Locking down future models for Australia, Mr Meunier said Jeep – and its parent company Stellantis – had succeeded in right-hand drive markets where rival General Motors was not, an oblique reference to the US giant leaving Australia, the United Kingdom, Thailand and India three years after Holden’s Adelaide factory closed.
“I’m not going to be sarcastic,” Mr. Meunier said, “but GM has struggled for many years with Opel in Europe. And Opel is now part of Stellantis and very profitable.
“So I think there’s a lot of things you can do differently. And we can be profitable in right-hand drive (countries) as long as you bring the right product with the right (engine options) into the right segments.
“Future models for the vast majority of our products (petrol or electric) will also be right-hand drive. We want to expand our business in India and Asia-Pacific. The region has a lot of ambitions.”
Jeep sales in Australia over the past 22 years:
- 2022 (January to August): 4,748, down 8.4% from the same period the previous year
- 2021: 7762
- 2020: 5748
- 2019: 5519
- 2018: 7326
- 2017: 8270
- 2016: 12,620
- 2015: 24,418
- 2014: 30,408
- 2013: 22,170
- 2012: 18,014
- 2011: 8648
- 2010: 5975
- 2009: 4193
- 2008: 5232
- 2007: 5744
- 2006: 5099
- 2005: 5078
- 2004: 4502
- 2003: 4389
- 2002: 4569
- 2001: 3584
- 2000: 3732
Source: Federal Chamber of Automotive Industries.