After a series of steep price hikes over several months, US off-road specialist Jeep says it remains committed to Australia even though sales are a fraction of its target of reaching 50,000 annually – and less than a third of its previous record.
Jeep global chief Christian Meunier says the American off-road specialist remains committed to Australia – and the right-hand drive market globally – even as the company is selling vehicles at a fraction of the pace it heralded three years ago and well. less than his previous local record.
The top Jeep executive also defended the series of sharp price increases over the past 12 months – including on vehicles that had received no extra equipment – insisting the company was not making a profit, but rather was passing on higher production and logistics costs, like many others the car companies have.
When asked about Jeep Australia’s recent sales performance of around 7,000 to 8,000 vehicles a year – against a stated target of reaching 50,000 annually, which is significantly more than the record of 30,000 set in 2014 – Meunier told Australian media at Detroit car show:
“So what we’re doing in Australia is trying to get Jeep’s business back on track. Last time I was in Australia … I think there was a lot of good energy and then ‘boom’ … a month later everything locked (on due to covid-19).
“Today, I think we’re doing a lot better than we used to. Obviously, there’s been semiconductor issues (and a) shortage of Wranglers. The Grand Cherokee was supposed to be launched earlier (but) it got delayed. So many logistical problems.”
Asked whether Jeep Australia’s sales ambition of 50,000 vehicles a year – the target stated 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 boss said:
“I think we’ll sell about 8000 (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 we can do the.
“I think we’re doing better, much better than we used to. I think we’ve changed a lot of things. I think the dealer engagement is better. The positive thinking is there.”
Asked if Jeep headquarters were still behind the Australian market, Mr Meunier said: “Ccompletely, completely. The strategy for right-wing steering is clear. You know, we invest for Japan, Australia, New Zealand … South Africa is now becoming quite a serious market for us.“
But Mr. Meunier noted that not all right-hand drive markets prospered.
“Britain is a struggle. I won’t deny that Britain has been a struggle for a while. We didn’t have the right cars, we imported the compass from India at the time, but Britain is more European, all the connections and everything is more European.
“So now we have taken the decision to get a European car from … Italy which will be a good asset.”
Asked whether Jeep Australia’s recent rounds of sharp price increases were motivated by profits or rising costs, Mr Meunier said: “Commodities, inflation and everything. Obviously we had some price recovery to do on the (profit) margin.”
Then, in a response that seemed at odds with the stated sales target of 50,000 vehicles a year, Mr Meunier said: “I think one of the reasons Australia really struggled is (just) chasing the volume.
“They chased volume and didn’t achieve it. They pushed the metal. They weren’t brand-focused. We’re not making a lot of money, dealers weren’t making money, and it’s a vicious cycle.
“What we’ve done is we’ve stopped all these entry-level versions … we’ve enriched the portfolio, we’ve made it more premium. So we have well-equipped products. We don’t go after the Koreans, we” we don’t go after the Chinese. We are not a mobility brand, we do not sell transport. We sell adventure.”
Asked to clarify whether it was still possible to increase sales and profits at the same time, Mr. Meunier:
“The prices you have in Australia are pretty consistent with what we have in Japan or what we have in Europe or North America.”
With future models locked in for Australia, Mr Meunier said Jeep – and its parent company Stellantis – had been successful in right-hand drive markets where rival General Motors had not, an oblique reference to the US giant’s exit from Australia, Britain, Thailand and India three years after closing the Holden plant in Adelaide.
“I’m not going to be sarcastic,” Mr. Meunier said, “but GM had 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 we can be profitable in right-hand drive (countries) as long as you bring the right product with the right (engine options) in the right segment.
“The future models for the vast majority of our product (petrol or electric) will also be right-hand drive. We want to grow our business in India and the Asia-Pacific region. The region has many ambitions.”
Jeep sales in Australia over the past 22 years:
- 2022 (January to August): 4,748, down 8.4 percent compared to the same period the year before
- 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.