What happened to Jeep? The mother of all SUVs has lost its edge as sales fall and cars pile up on dealer lots (2024)

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There's no denying that Jeep has been an icon since its founding in 1941.

From its historical role as a war-winning vehicle to the flagship Wrangler to the impressive Grand Cherokee, the Jeep brand is well known and has a cult following, complete with its signature owner wave.

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But Jeep sales have been down in recent years.

Jeep sold more than 973,200 vehicles in 2018, the brand's best year on record. Since then, its luck has faltered, selling just 684,600 vehicles in 2022, a nearly 30% decrease.

Sales have continued to decline for the past several quarters. As the company goes electric, it may be banking on tapping into a new customer base, but the interim has been painful.

For one example, a supplier just tapped out of a contract with Jeep over losses from the brand, Crain's Detroit Business reported.

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Jeep loyalty is also shifting.

In 2019, 47% of Jeep owners traded their former vehicles in for Jeeps. But by the first half of this year, that fell to 43%, according to Edmunds.

Though a sizable chunk of Jeep owners still trade in for another one of Stellantis' vehicles, that number is slowly declining, 37% in 2019 to 36% today.

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And Jeep has more inventory sitting on lots than many of its peers.

While competing automakers are operating rather lean and intentionally keeping lighter levels of supply at dealerships, the number of cars Jeep has on lots is considerably higher. (This number isn't always a red flag, depending on how popular a car is or how an automaker handled supply shortages in recent years.)

Jeep had 77 days' supply at the end of June, according to Cox Automotive —higher than the national average of 53 days. Ford isn't far off, at nearly 76 days, but GM's GMC and Chevrolet sat at 63 and 50 days' supply, respectively, in the same period.

Meanwhile, Toyota, at 27 days; Hyundai, at 49 days; and Honda, at 28 days, were substantially lower. Jeep was also offering some of the highest incentives of its peers, about $3,294 a vehicle by the second quarter, according to Cox.

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All sorts of challenges have hit the Jeep brand and most of its lineup in recent years.

In addition to industrywide supply and logistics constraints, Jeep discontinued the Cherokee earlier this year (at least for now). Production of the Grand Wagoneer and Wagoneer fell short in the first half of 2022, and its plants are now in critical status, running seven days a week. And Wrangler production saw hiccups in preparing for its upcoming refresh.

Company leadership knows these hurdles are the result of a confluence of factors, not only for Jeep but also many of its auto brands.

"I can tell you from inside that many things went wrong," Stellantis CEO Carlos Tavares said on an earnings call in July. "We want to be better. We want to fix our operational issues in a more efficient way."

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Enter: Competitors

Stellantis has also stopped allocating gas-powered versions of some of the popular Jeeps in 14 states because of increasingly stringent emissions regulations. Customers in those states can buy only plug-in hybrid versions of those vehicles at dealerships. That could lead customers to look elsewhere.

"What happens if you're a Jeep customer and you don't want a plug-in hybrid, but you do want a Wrangler and they don't have that on the lot?" Robby DeGraff, an AutoPacific analyst, told Insider. "Are you going to go to Ford and just go ahead and get a Bronco right then and there because it's readily available and you won't have to wait for it?"

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There's a cool factor in the Bronco, and it's attracting Jeep drivers.

Of Wrangler owners who traded in their vehicle in the first half of this year, increasingly more are looking elsewhere, with 2.6% opting for a Bronco, and another 0.8% going for a Bronco Sport (if they didn't go for other Stellantis vehicles), according to Edmunds data sent to Insider.

"Even though it's been on sale for two model years now, the Bronco is still getting a lot more attention," DeGraff added. "There's just this cool factor about it that has not gone away."

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Dodge, Ram, and Chrysler have had the same inventory build-up as Jeep. As a result, the brands are pushing bigger and bigger incentives.

Dodge, Ram, and Chrysler saw nearly 96, 99, and 97 days, respectively, of inventory on lots at the end of June, according to Cox estimates. They're also boosting incentive spending; at the end of Q2, Dodge was averaging $2,133 a vehicle, while Ram was at $3,842 and Chrysler hit $1,668.

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But Jeep, these other well-known brands, and Stellantis as a whole are looking toward the future.

"Constantly, we are managing through our product strategy, the rebound of our business with fresh product, which, by the way, is a fantastic tool to support pricing power, which is part of our profitability," Tavares said during Stellantis' earnings call.

"If we already have a very sound four-month order book, we think that in terms of demand," the second half of the year will be OK, he added.

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