A new five-year plan for the Jeep brand of Fiat Chrysler Automobiles (FIATY.PK) was announced by CEO Sergio Machionne on Tuesday, laying out an ambitious set of goals to bring the company into the global fold by ramping up production, opening new dealerships, and introducing new models. There will also be some models dropped from production as Jeep focuses on new additions and lofty sales goals.
According to The Wall Street Journal, the Jeep plan is simply a part of an overall proposal to revamp Fiat Chrysler as a whole. The plan includes increasing the company’s sales from 4.4 million last year to 7 million units in 2018. Jeep is at the center of the company’s goals, with hopes to double sales numbers in that time. There are also hopes that other brands, including Maserati and Alfa Romeo, can see a boost in sales as well. The expansion into overseas markets is a major step for Jeep, which has so far been focused mainly on North American consumers.
Here are the five key aspects of Jeep’s five-year plan, and where it hopes to go in the next several years.
1. Expand the model lineup
The big takeaway from the announcement was the addition of new models, including the Jeep Renegade, due out for 2015. The Renegade will be the first new model to roll off the assembly line, bringing with it Jeep’s entrance into the compact crossover realm. Featuring a sporty and rugged design, the Renegade also sports a new Tek-Tonic interior, said to be a mix of nostalgia and sophistication. Although it has yet to even be released, it’s already slated for a redesign in 2017.
Another addition to the Jeep lineup is slated for 2018, when the Grand Wagoneer is set to make its rebirth. Executives have called the Grand Wagoneer the most premium of Jeep’s products, but consumers will need to wait several years to see for themselves. Boasting three rows of seating, the entry into the lineup will reportedly be the most spacious Jeep has to offer.
There will be some casualties, as the Patriot and Compass will be coming to an end in 2016. The two SUVs, although popular, have underperformed and will not be continued under the announced plan.
2. Expand the number of dealerships
Another notable piece of news from Jeep’s announcement is the planned expansion of dealerships, totaling 1,300 additional retail locations in all; most dealerships are planned for Latin America and Europe. It’s simply the first piece in Jeep’s newly increased emphasis on overseas operations.
As part of Chrysler’s confidence in the Jeep brand, the company is taking it worldwide to satisfy appetites for SUVs around the globe. CNBC reports that Jeep is particularly interested in ramping up sales and enthusiasm in Asian markets, where the brand has thus far had a minimal presence. By boosting the number of dealers and adding production facilities in Asian countries, hopes are that sales will grow as a result.
A positive that might come from the dealership additions is additional jobs added to the economy, particularly in the United States. After many dealerships of all brands were forced to shutter in the past several years, any company adding jobs is sure to be seen in a positive light by the public at large. Can Jeep take that angle and see some increased enthusiasm? Or will the company’s expansion oversees turn Americans off? Right now, we’ll just have to wait and see.
3. Double sales by 2018
Perhaps the most ambitious goal coming from Machionne’s proclamation, the doubling of sales over the next four years is a lofty objective. Jeep has really only focused on selling its SUVs to American consumers throughout its history, so it may not be as difficult to reach that sales goal, as expansion into new and enthusiastic markets could lead to a boom.
Jeep is expecting sales of 1 million SUVs this year, according to Jeep brand head Mike Manley. With the number of dealers in Asia tripling and other dealers spread across Europe and South America, sales should pick up. American numbers should see a jump as well, with the new additions to the current vehicle lineup and fresh redesigns on the way.
“This fully opens up key markets around the world that we’ve been constrained in,” Manley said in regards to the expansion plans. Chrysler is betting a lot on the strength of Jeep — with its big investment, it is expecting a big return. Although Jeep is still considered a niche automaker compared to its bigger rivals, it did see a jump of 36 percent in sales in 2013. Those numbers give executives confidence moving forward.
4. Take production global
Not only are dealerships expanding internationally, but so is production. Jeep plans on rolling out production plants to five additional countries other than the United States. Thus far, production for the Jeep brand has been constrained to the United States, but with new models and redesigns on the way, assembly lines will need to expand to foreign markets to keep up with what Chrysler executives hope will be increased demand.
Expanding to five additional countries, Jeep plans to move some metal, as production increases are expected to supply the new 1,300 or so dealerships that are planned to be built worldwide. Manley said that increased sales could come as a result of local production. “China and Brazil are forecast to represent 32 percent of the global market, and today we’re a niche player because we are an import-only brand,” he said to the BBC.
If Manley is right, then a third of new sales have the potential to come from those two countries alone. Jeep can soon expect to get an indicator of how its vehicles will move in Europe, as the Renegade is slated to go on sale to European markets before American ones. With other countries also receiving production plants, Jeep might be putting itself in position to become an international bestseller.
5. Roll out cornerstone model redesigns
The final key aspect from the Chrysler announcement is the redesign of cornerstone models, including the Wrangler and Grand Cherokee. Refreshed models are already well on their way, with a new Grand Cherokee planned for next year. The following year, a redesigned Cherokee is slated to be released, followed by a new incarnation of the Wrangler in 2017.
Jeep is wasting no time redesigning its redesigns, with 2017 shaping up to be a refreshing year for the company overall. The Renegade, which has yet to be released, will receive an update that year, as well as the Grand Cherokee, which will have just been redesigned, too. Keeping things fresh and new may be a part of the company’s new sales tactic, and if it pays off, consumers can expect to see a variety of SUV designs hitting the roads over the coming years.
By placing an emphasis on its cornerstone models like the Grand Cherokee and Wrangler, Jeep is sticking its strengths. Both models have long been customer favorites, and by slating a preemptive redesign of the yet-to-be-released Renegade, Jeep is probably betting that it will be a hit, as well. Chrysler is really putting its faith in Jeep’s strength and in its engineers’ ability to create new and fresh vehicle designs.