Jeep to reset in 2017

FIAT Chrysler Automobiles (FCA) Australia is working hard on the aftersales servicing program for its Jeep brand as it gears up for a raft of new product and a targeted sales return to 30,000 units per year.

The SUV specialist has faced a sharp rise followed by a sharp decline in sales, perceptions of poor quality and criticism of its aftersales service in Australia in recent years, but the company is now focused on rectifying this and regaining lost ground.

Jeep recorded its best annual sales in Australia in 2014 when it hit a high of 30,408, a huge leap from the 5078 vehicles it sold in 2005 and even the 18,014 tally from 2012.

However, sales dropped by about 20 per cent in 2015 to 24,418 and, with just one selling month to go in 2016, sales are down by just under 50 per cent with 11,711 units shifted.

Speaking with journalists at a media event last week, FCA Australia president and CEO Steve Zanlunghi said he was confident that Jeep could return to its sales highs down the track, but acknowledged that there was much work to be done.

“I think eventually we could,” he said. “For next year, we are looking for modest but sustainable growth versus 2016. We are not looking to take over the world, we want to continue to build a solid foundation.

“Towards the end of the year you will see the introduction of the all-new Compass we showed in LA and that will probably end up being our biggest volume vehicle. I think from there we could start looking at higher volume aspirations.” Mr Zanlunghi said the Jeep sales slide had started to abate and suggested that the brand may have finally hit a turning point in Australia.

“I am not proud of this, but if you look at year-to-date sales they are down 49 per cent. Over the last couple of months we have narrowed that gap and last month it was down 32 per cent.

“So we are narrowing the gap year-on-year, and we think … we’ve got it to a level that we can now start to build on top of it. There were a lot of different factors going into it. We think we have a good plan going into it.” He added that the company would be in a better position to predict sales volumes from 2018.

“We are not putting any massively aspirational volume growth out there. We would like to get back to 30,000 units, my boss (global head of Jeep brand Mike Manley) is on record as saying he’d like to get back to 30,000 units. In order to do that I think you need to have new Compass in the line-up. So 2018 will really tell what the potential is for the brand.” The Compass compact-to-mid-size SUV will arrive in Australia in late 2017 and is expected to have wider appeal than the similarly sized but polarising Cherokee and the smaller, quirky Renegade.



Left: FCA Australia president and CEO Steve Zanlunghi. While it is yet to be officially confirmed, the ballistic 527kW/881Nm supercharged V8-powered Grand Cherokee Trackhawk is expected to follow the Indian-built Compass into Australian Jeep dealerships in 2018, as is a facelifted Cherokee.

The next-generation Grand Cherokee is not expected until late 2018 or early 2019 before it spawns a seven-seat Grand Wagoneer variant before 2020.

As previously reported, FCA Australia has implemented a number of programs and strategies to help improve its aftersales service levels.

Some of the issues were brought to light in an investigation conducted by the Australian Competition and Consumer Commission (ACCC) in 2015 that looked at between 800 and 1000 consumer complaints.

Since then, the company has expanded its parts warehouse, is now fulfilling 95 per cent of orders, streamlined the customer call centre, introduced better tracking systems for the parts delivery, and rolled out its ‘Dealer Driven’ initiative, a consulting program that all dealers must undertake to improve customer handling skills.

Mr Zanlunghi said the company has also decreased the pricing of the top 100 Jeep parts to ensure they are more affordable, and, as GoAuto has reported, FCA Australia is looking at potentially expanding the current three-year warranty to five years.

Despite some criticism levelled at dealers, Mr Zanlunghi said the company took ultimate responsibility for customer aftersales issues.

“This isn’t the dealer’s fault, the reason the perception is where it is at. A lot of blame (can be) laid on us. If a dealer can’t get parts, they can’t repair a customer’s vehicle. They might be looking at a dealer saying this is your fault. We need to do a better job to be able to take care of customers.” When asked what was being done at a manufacturing level to ensure the number of faults was being reduced, Mr Zanlunghi said information was sent from Australia as soon as it arose.

“If we know we have a warranty issue that happens and reoccurs, this gets fed back to our engineering community. We are constantly looking and evolving and trying to change that. And if we get specific issues that come up in one particular region, we will look to make a change for that particular region.” Mr Zanlunghi acknowledged the impact pricing can have on the line-up and sales and highlighted some of the actions the company has taken in recent months.

“Part of that has to do with fluctuation of the exchange rate. For us every fluctuation of one cent, on average, if we are selling our cars at $40,000, is about $400 in movement. So it can either help or hinder a brand.

“Over the last year and a half, we have taken some... tough decisions, but to protect the profitably of company we had to take some price increases, which kind of priced us out of market in some of the areas. If you look at some of the actions, I’ll use Renegade, we compressed the line-up … and kind of lowered the price which put us right on the main competition in the compact SUV segment. In November it had its second best month ever. We just did same thing with (Fiat) 500X at the start of December. We had our second best week ever since the launch for 500X.”