Jeep Grand Wagoneer SUV delay worries FCA dealers

by admin June 17, 2018 at 5:10 pm

Marchionne’s plans have had years of delay.

DETROIT — More than seven years ago, Fiat Chrysler Automobiles CEO Sergio Marchionne said Jeep desperately needed a three-row luxury SUV, calling for a quick return of the Grand Wagoneer.

He repeated that need in 2014, 2015, 2016 and this month.

But after years of delay and internal design debates, the Grand Wagoneer hasn’t arrived.

Now, as economic factors tighten, some FCA dealers openly wonder whether the Chevrolet Suburban/Lincoln Navigator fighter might have missed the party.

John Murphy, research analyst at Bank of America Merrill Lynch, told the Automotive Press Association last week here that the “Goldilocks” era in auto retailing was largely over.

Murphy painted a challenging picture over the next five years — reduced U.S. vehicle sales, higher interest rates, lower used-car values, increased fuel prices, elevated raw materials costs, concentrated competition in the light-truck sector — all pointing to harder times for dealers trying to sell high-priced vehicles.

“I think our window of opportunity is closing,” a longtime FCA dealer told Automotive News, speaking on condition of anonymity. “We could have killed with [the Grand Wagoneer] if it had been available when they first told us about it, but it’s a much tougher sell with interest rates and gas prices going up.”

As late as September 2016, Marchionne and Jeep head Mike Manley envisioned the Grand Wagoneer as an up-to-$140,000 luxury three-row unibody vehicle that would share underpinnings with the next-generation Grand Cherokee and compete with Land Rover’s Range Rover.

But FCA’s North American manufacturing footprint and other product plans forced a rethink — and a delay. In January 2017, Marchionne said the company would transform the Wagoneer and Grand Wagoneer into body-on-frame vehicles that would compete with large three-row SUVs from domestic rivals General Motors and Ford Motor Co. at a lower price.

“We’ve confirmed Wagoneer and the Grand Wagoneer as being body-on-frames,” Marchionne told reporters at the 2017 Detroit auto show. “All those decisions that we’ve been working on are out. We’re just in execution mode.”

That was good news for FCA dealers, who looked forward to going head to head with such GM cash cows as the Chevrolet Tahoe and Suburban with a three-row, high-end Jeep SUV.

But FCA again delayed the Grand Wagoneer’s return to ensure that dealers would continue to have enough Ram 1500 pickups to sell. The luxury Jeeps eventually are to be built at FCA’s Warren Truck Assembly Plant in suburban Detroit. But that factory is scheduled to keep building the previous-generation Ram 1500 at least through year end, Marchionne says, as production of the redesigned Ram 1500 ramps up at the nearby Sterling Heights Assembly Plant.

And production of the high-profit, previous-generation Ram 1500 could extend into 2019, depending on demand, Marchionne said this year. After a necessary retooling, that could mean the Grand Wagoneer will be delayed until late 2019 or even into 2020 — nearly three decades after its predecessor went out of production.

Bank of America’s Murphy predicted last week that annual U.S. sales could decline from the recent range of 17 million to as low as 13 million by 2021. That could put the luxury Jeep’s return in the heart of a predicted downturn.

“The Grand Wagoneer will still sell because it’s a Jeep,” a second FCA dealer told Automotive News. “But it would have been nice to have them already.”

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