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Jeep plans for sales resurgence

Opposite lock: Jeep is planning to counter its sales slide with an all-encompassing plan that will reverse declining numbers, with a focus on improved aftersales standards and new models on the way.

Recalls and market challenges denting sales but Jeep has a plan

19 Aug 2016

AFTER a peak year of sales in 2014, Jeep has been fighting the current of unfavourable exchange rates, fierce competition and the spotlight on a number of recalls, but the iconic SUV-builder is crafting a strategy that it says will turn the tide in its favour.

Its tally of 30,408 registrations in 2014 fell to a full-time score of 24,418 last year and the numbers have continued to slide in 2016 with 7789 units shifted to the end of July, representing a huge 52 per cent slump over the same period last year.

A number of product safety recalls have recently marred the reputation of the seven-slot grille brand including a roll-away fault that has prompted a gear selector redesign, while rivals continue to join the various markets that Jeep competes in with aggressive sales strategies.

Speaking at a Jeep media event, Fiat Chrysler Automobiles (FCA) Australia corporate communications director Lucy McLellan said the recalls were likely to be having an effect on Jeep’s brand strength, but it was difficult to establish how much it was responsible for slipping sales.

“We’re not ignorant about that fact that business processes, like recalls, can impact on the perception of a brand, but it’s hard for us to correlate that to recent sales results,” she said.

“We’ve had passing pressures obviously, foreign exchange for example, have hindered our ability to be as competitive as what we’ve been able to be in recent years.”

However, Ms McLellan explained that it is possible to turn the trend around and that the company was building a comprehensive strategy to counter the decline with the continued update of its range, improved customer relations as well as maintaining its focus on the Jeep brand.

“We’ve implemented a really strong dealer service coaching program, we’ve reconfigured and re-launched our net promoter score program, which means that the dealers can have full transparency to allow them to take swift action if and when issues arise and we’re currently investing in a whole new customer relationship management program which is about to be rolled out to dealers.”

The Grand Cherokee continues to be Jeep’s best seller since the WK’s update in 2013, but even the cash cow has been in a downward direction with 4092 finding homes to the end of July, compared with 7274 for the same period in 2015, a 43.7 per cent dip.

Help is on the way though and some important additions to the line-up are expected to complement the strategy over the next 12 months.

The Grand Cherokee is due a refresh at the end of the year bringing a facelift, a number of technical updates and some tweaks to kit and equipment.

After that, a long overdue replacement for the ageing Patriot and Compass pair will follow an expected reveal in Brazil next month, but it is unknown which of the monikers will be applied to the new model or if both will be retired in favour of something new.

Despite their vintage, the small SUVs continue to attract consistent – albeit minimal – numbers each month, with 168 Compasses sold in May this year, while the Patriot’s best month was February with 102.

Jeeps stalwart and flag-carrying Wrangler will also break cover in its next generation next year and is expected to be offered in Australia soon after, creating a new talking point for the company and one that is likely to invigorate the brand.

The venerable Wrangler has a strong following globally as well as in Australia but even it too is failing to attract consistent attention. Just 83 found driveways in July compared with 170 in July 2015 and its best month to date in December 2011 when Australians bought 389.

Ms McLellan did not offer a time frame but said that the various facets of the plan would take time to gain momentum, and that the results would come once the foundations had been laid and built on.

“FCA is going through that transformation time to take us on our next sales trajectory,” she said. “We are very much building strong foundations at the moment so this business can continue to strengthen and succeed.”

Another element that is likely to boost sales is FCA’s decision to rehouse its Alfa Romeo brand in a national standalone dealership network that will allow the Jeep, Fiat, Dodge and Chrysler sister brands more breathing space on showroom floors.

The Alfa transition will start next year with the first dealerships cutting red tape in 2018.

Ms McLellan would not elaborate on the the possibility of increased Jeep branding activity as a part of the multi-stage strategy, but said that the potential for promotional projects was “limitless” leaving the door open for further activity as the company fights for a greater share of the various segments.

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