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Jeep primed for sales growth return

Growth spurt: Jeep Australia is expected to return to growth on the back of the launch of the new-gen Wrangler (below) and facelifted Renegade (left) in 2019.

Fresh product, stronger aftersales support to spur Jeep’s sales turnaround

Jeep logo4 Sep 2018

JEEP Australia’s fresh product rollout is just one piece of its plan to return to sales growth, as the SUV specialist works on implementing new back-end processes to boost consumer confidence and dispel questions around vehicle reliability.
 
Speaking exclusively to GoAuto, Fiat Chrysler Automobiles (FCA) Australia president and chief executive, as well as head of the Jeep brand for the Asia-Pacific region, Steve Zanlunghi, would not be drawn on the level of sales increases he was expecting, but said the company would avoid the rapid, unsustainable growth it experienced four years ago.
 
“We’ve got our internal targets that we’re looking for here,” he said. “You’ve heard me say it before that we’re looking for moderate controlled growth.
 
“We don’t want to grow out of control like we did in 2014 because that’s what got us in trouble.
 
“We had limited capacity on the back end, and that caused some of our customer angst. So, yes we want to grow, but we don’t want to be in an uncontrolled growth situation.”
 
Left: Fiat Chrysler Automobiles (FCA) Australia president and chief executive Steve Zanlunghi
 
Since Jeep’s high watermark of 30,408 new vehicle registrations in 2014, sales have been in rapid decline, clocking 24,418 sales by year’s end in 2015, 12,620 in 2016 and just 8270 last year – its lowest yearly tally since 2010.
 
So far this year, Jeep sales have slid even further from last year’s pace, notching 4650 sales to the end of July, an 8.4 per cent drop over the same period last year.
 
However, Jeep is also in the midst of a fresh product onslaught so far this year, launching a new-generation Compass small-to-medium crossover, the flagship Grand Cherokee Trackhawk performance SUV and the facelifted Cherokee medium SUV that will hit showrooms in October.
 
However, Mr Zanlunghi revealed that the Wrangler off roader that was earmarked for a late-2018 Australian launch has now been pushed back to early next year due to the overwhelming demand in international markets.
 
Jeep’s updated Renegade small SUV is also expected to launch locally in early 2019, giving the brand a rejuvenated product portfolio to capitalise on Australia’s SUV-hungry market.
 
Mr Zanlunghi would not commit to a timeframe of returning Jeep to sales growth, but said new brand initiatives would play a part in rebuilding the company’s reputation in the wake of a large number of product recalls and high-profile reliability cases.
 
“This marketplace, it’s fairly competitive because you’ve got the competitors that are fighting for every inch of sales, as are we, so it’s not just a matter of launching a new product and you're going to get there,” he said.
 
“With Jeep, it’s all kind of the whole product puzzle together, so it’s not going to be ‘hey, this one vehicle is going to do it or maybe this vehicle is going to do it’.
 
“I don't have a crystal ball, I can’t tell you what will or won’t happen. What I do know is, like I said, we’re introducing new products, we’ve done a lot of things on the back end and a lot of things to repair the reputation here with Jeep.
 
“And we’re starting to see some early indicators of it taking hold.”
 
Mr Zanlunghi said dealer and staff training, as well as the introduction early last year of a five-year warranty on all new Jeep vehicles, put the brand on the right path for customer satisfaction, which has already yielded tangible results.
 
“We’ve done a lot on the aftersale side, and I’ve got a whole list I can take you through,” he said.
 
“Our customer care cases so far this year are down 80 per cent – close to 80, just below 80 – and that’s on top of a decrease we had in 2017 as well.
 
“Then when you look at … customer buybacks, when we have to buy back vehicles, that’s down 73 per cent. So that means a lot of the things we’re putting in place are taking hold in the marketplace. 
 
As for repair and recall work, Mr Zanlunghi said new processes in the back end meant that vehicle fixes are now completed sooner and more efficiently.  
 
“What we’re doing is we’re doing a lot of technical training, to make sure our technicians are trained,” he said. “We’ve got a consultant program that we’ve got out with the dealers that we kicked off about a year-and-a-half ago – that’s also been working and taking hold.
 
“We’ve increased our warehouse parts supply by 200 per cent. Our fill rates have gone up to 96 per cent – a fill rate is when a dealer orders a part, you know what percentage is filled on the first time. 
 
“Now we’ve got trucks that are coming here to our warehouse and then take them directly to the dealers, so it cuts down on the repair times as well.
 
“We’re fixing customers cars right on the first time, the parts are here.” 
 
Mr Zanlunghi said: “A lot of things that we’re working on behind the scenes, you couple that with the new products, we’re building a really good foundation.
 
“What we’re doing is we’re building on good foundations to control the growth,” he said.
 
“And it's finding where you can improve the fastest. So when you're in a situation where you've got a lot of opportunity, what you try and do is you try and pull down the low hanging fruit, to make the most impact as quick as possible. 
 
“One of the things you don't want to do, is you don't want fight a multi-front battle because then you lose the war. You have battle by battle, that's how you win the war.”
 
However, one of the priorities for Mr Zanlunghi has been turning around in-house morale. 
 
“So we've got a priority list here internally that we've been working on,” he said. “I think one of the biggest things that we've done is to put the focus back on the brands here. 
 
“Two years ago … it was one team handling all brands and what you saw was, you saw employees going to work on what was the easiest brands. Now we've split that apart, and we've got a brand focus that we do globally and that's what we look at.
 
“I think one of the things I'm most proud of that I see, and this might not be huge in the market, but it's making an impact, is the level of commitment we have from our sales consultants now. 
 
“They are very brand loyal, the training and the commitment that the dealers and the sales consultants are putting in … they're paying results, because we measure this, and it's not just us measuring it, it's external … and we had the highest improvement of overall sales satisfaction.”
 
Mr Zanlunghi has been working on Jeep’s sales recovery plan since taking the top job at FCA Australia in August 2016, but said the brand, like any business, can always be improved upon.
 
“I can only tell you what I identified as being need to be fixed, so I can’t speak for any of the other previous management that was here,” he said.
 
“Maybe they had a different view, different strategy, but this is the strategy that I’ve set out for here in Australia.
 
“You can always get better, always. It doesn’t matter who you are or what you do, you can always be better.”

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