FCA is struggling with what to do about increasing the production capacity of the Wrangler's long-time home plant in Toledo, Ohio.
Sales of Jeep-branded vehicles are on track to hit roughly 1.2 million this year, according to the FCA U.S. executive responsible for the nameplate.
Michael Manley, president of the Jeep brand, noted that Jeep sales have increased by 20% so far this year, after topping 1 million units for the first time ever in 2014. The plants belonging to FCA U.S., formerly the Chrysler Group, building vehicles such as the Jeep Grand Cherokee and Wrangler are having difficulty keeping up with the demand from customers, he told reporters at the company’s proving grounds in Chelsea, Michigan.
Sales of the Jeep Cherokee, which was introduced last year, and the sales of the Jeep Renegade introduced this past spring are also doing well in the U.S. The Renegade is proving very popular with European customers and sales of other Jeep products also remain strong in Europe.
Meanwhile, FCA continues to wrestle with finding a way to build more Jeep Wranglers, which is at the heart of the Jeep line. FCA is currently looking at ways to rebuild or replace the Wrangler plant in Toledo, Ohio.
The new Jeep Renegade is being well-received in Europe and Brazil.
“It’s a very important and very sensitive decision,” said Manley, who added no plan has been approved yet.
However, FCA also has opened a new plant in Brazil to build the Renegade. While the Brazilian economy has been softer than expected, the sales of the Renegade have been fairly robust, Manley said.
“The local market is lower than anyone would have predicted last fall, but response to the Renegade (in Brazil) has been very positive,” he said.
(New Grand Cherokee delayed, Jeep says. For more, Click Here.)
Manley said Jeep’s expansion into China, which has been in the planning stages for the better part of three years, will begin this fall with the introduction first of the Renegade and then of the Chinese version of Jeep Cherokee, which will be built in a plant in Guangzhou in southern China.
The expansion of Jeep into China is important in boosting Jeep’s sales towards its ultimate goal of 1.9 million units by 2019 at the end of Fiat Chrysler Automobiles latest five-year plan. The goal of 1.9 million units is clearly within the reach of the Jeep brand, noted Manley, who has been instrumental in FCA’s expansion in to China.
(Click Here for details about the Dodge Challenger Drag Pak.)
In addition, dramatic expansion of Jeep sales since the end of the recession in 2010, Jeep also has managed to win over more and more affluent customers, Manley said. The average transaction price of the Jeep Grand Cherokee is around $35,000, Manley said. But upscale versions of Grand Cherokee Laramie carry price tags of more than $45,000 and successfully compete for customers with brands like BMW, Lexus and Range Rover.
Joe Phillippi, an analyst with AutoTrends, said Jeep’s ability to command luxury-level ATPs has been most impressive. Moreover, Jeep doesn’t appear to have bumped into any kind of ceiling and customers are willing to pay luxury-car prices for Jeeps.
(To see more about hot June auto sales, Click Here.)
“We’ll leave the questions of about the merger to our CEO,” said Manley, adding whatever happened he was confident that the Jeep brand, which has now had eight different owners since the early 1940s, will certainly survive.