Market Insight: Jeep changes tack to increase sales

GET ready for a renaissance at Jeep. Once the darling of the off-road brigade and the go-to brand for buyers needing to brush up their macho image, Jeep has taken some big tumbles in the Australian market over the past five years.

Six years ago, in 2014, it sold 30,408 units and in that, almost 16,600 Grand Cherokees, nearly 4000 Cherokees and almost 3000 Wranglers. Times were good and the Grand Cherokee was the nation’s most popular large SUV with a 15.4 per cent segment share that outsold even the Toyota Prado (15.0 per cent).

Then things soured. Quality control issues and a rise in dealer complaints by customers based on service and warranty problems damaged consumer perception of the brand.

In 2019, 8270 Jeeps were sold – 27 per cent of the volume of six years earlier.

But the tide is turning. Speaking to GoAuto last week, Fiat Chrysler Automobiles (FCA) Australia managing director Kevin Flynn said the product line-up, service and parts back-up and indeed the whole attitude from FCA including its dealers, is radically different from five years ago.

“There was a lack of consumer trust and that was well publicised,” a disarmingly honest Mr Flynn said.

“Those things have been dealt with and now I think we have a very good quality product range coming through and a great future.

“A lot of things have changed from the top of Jeep right the way through to the dealer showroom floor and the dealer workshop and absolutely everyone in between.

“Now we respond (to problems) and work to make sure small issues don't turn into big issues. I think putting the ‘flying doctors’ into the field has been one of the important turning points.

“As soon as an owner has an issue that could be a challenge, we dispatch one of our key technical team to get on top of it and find a solution.

“So I think our attitude is very, very different.”

Mr Flynn said the new strategy “is starting to pay dividends”.

“Certainly attitudes in the digital space and social media have dramatically shifted from a year ago,” he said.

FCA Australia started its shift to improved customer service first in 2017 under then-managing director Steve Zanlunghi, introducing a five-year warranty and five-year capped price servicing added in 2017 and subsequently improved on in 2020.

“We are now delivering on all the key promises we made, despite facing the problems caused by COVID,” Mr Flynn said.

“We have repriced 17,000 part numbers, and they were the part numbers that were actually supplied over the previous 12 months; we have put the ‘flying doctors’ in place; we have put capped price servicing in on all of our new vehicles.

“Next year we are focusing on technical competence and training in the dealerships, even though we've had to do a lot of that by virtual rather than face-to-face.

“This year we have introduced a simplified product range. On top of that, we have a very, very strong marketing and advertising campaign based on being truthful about past mistakes that is really making a big difference to consumer perception.”

Jeep has strengthened its ad campaigns and increasingly puts the human factor into the commercials to tie in with its push to regain trust.

The “There and Back Guarantee” (2017) campaign outlined the service and warranty changes and the inclusion of lifetime roadside assistance (when the vehicle is serviced at a Jeep dealer).

“You Bought a Jeep. We’re Making Changes” followed and then in mid 2020, the “I’m In” umbrella campaign that revisits the personal approach triggered with “I Bought a Jeep” of 2014.

Jeep brand sales jumped 40.7 per cent in October. The Grand Cherokee sold 272 units in October, up 14.3 per cent on the same month in 2019, and for the 10 months of this year, found 2161 new owners, down 16.1 per cent on the same time last year.

Respectively, the Cherokee sold 15 in October (down 53.1 per cent) and 331 year-to-date (down 25.8 per cent); Compass sold 90 in October (up 114.3 per cent) and down 26 per cent at 537 on 2019; the Renegade has gone from the line-up (but may return); the Wrangler sold 97 in October (up 19.8 per cent) and 925 for the year, down 1.7 per cent; while new starter Gladiator sold 79 in the month and 388 for the year.

On product, Mr Flynn said the seven-seat market “is a very interesting one” and said FCA Australia was “making appropriate plans to make sure that we can meet the opportunities that lie in the market” without confirming the three-row Wagoneer for Australia.

“The Renegade was removed from our market as its size just didn't quite work for us but I would never, never write that off as the next generation may be something that we can take again,” he said.

“But we believe that Compass is one that should play a far bigger role than it does today.

“As you know, I've got a particular passion for that vehicle having been involved with it from concept to manufacturing and then launching it in India. We pioneered the right-hand drive capability from that plant and of the four Compass plants around the world, the Indian factory had the highest quality.

“I think the car is fantastic. The sophistication of some of the componentry, like the suspension with frequency-adapting dampers, and the compact Chapman suspension at the rear, I just think it has a lot more than people perceive it to have.

“And we got to do a better job of getting people to understand the pure depth of that vehicle, and its capability, especially in four-wheel drive.

“I just don’t think we did the Compass justice when we launched it. So now it’s right in the middle of our ad campaign “I’m In” and we have simplified the Compass range and improved the specification, particularly safety.

“If you compare Compass with rivals, spec on spec, I think we're right at the top. It’s a great, great package and beautifully put together.

“So I think it's time people understood where it fits. It’s a very, very different vehicle from its predecessor and the sophistication is also very different.

“So that means its pricing position is different and so is its value proposition. I think it will take a bit of time (to lift Compass sales) and it’s not going to happen overnight.

“We're seeing increased sales and we're seeing increased conversions once people are looking at the vehicle. So I think it's performing quite well from a conversion point of view.

“But actually, we still need more people to be looking at it and driving it.”

The trickle-down is that FCA Australia’s developments are making sales.

“In October this year, our sales numbers showed a big jump (40.7 per cent compared with October 2019) that was really rewarding,” Mr Flynn said.

“We have a robust plan to the end of the year and then into 2021.

“I’m not making any market share predictions but I think the groundwork has been done and looking forward to our recovery continuing.”