With crossover and SUV sales booming, you would think Jeep would be one of the big winners. But that isn't the case. The Detroit Free Press reports that Jeep sales are down 13 percent in the first half of 2017 - 406,291 vs. 465,243 in 2016.
Jeep CEO Mike Manley isn't worried. He tells the Free Press that the company knew sales would decline this year, but are expecting them to bounce back beginning in the second-half of the year with new and updated products. Some of the products include the next-generation Wrangler, Wagoneer, and updated versions of the Cherokee and Renegade.
"If you look underneath the numbers, we’re doing exactly what we said. We’re in plus or minus 1% of exactly where I thought we would be in the U.S," said Manley.
Part of this decline according to Manley is due to Jeep reducing fleet sales to focus more on retail sales.
But given the demand for crossovers and SUVs, Jeep's decline is something that cannot be overlooked. Morgan Stanley analyst Adam Jonas notes in a report last week that Jeep accounts "for roughly 45% of FCA’s sales, 55% of revenue and nearly 75% of FCA’s (operating profit)."
"That is Jeep’s territory where the market is right now … and they don’t seem to be capitalizing on it. Yes, Jeep is an iconic (brand), but I think them being down what it has been is surprising," said Michelle Krebs, executive analyst at AutoTrader.com.
Jessica Caldwell, senior analyst with Edmunds.com tells the Free Press that Jeep is facing tougher competition as more automakers throw their weight into the SUV/Crossover realm.
“The issue now is that because SUVs are so popular in the market, other auto companies are heavily investing money in this space. Jeep has kind of always had that corner on this market, (but) a lot of other car companies are trying to encroach on their territory."
But Caldwell expects Jeep to bounce back partly due to new products, but also the Jeep name.
"Jeep is down, but given that they're an SUV brand, they're probably better poised to bounce back and it's not just one product that is going to help them do that, but the host of products that they have coming ... should definitely help,” said Caldwell.
"Jeep is much stronger than the FCA brand. People know exactly who they are and what they are. ... (It) gives them an advantage as long as they keep true to that identity."
Source: Detroit Free Press