Life Auto ‘Total lemons’: Jeep’s struggles continue to grow
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‘Total lemons’: Jeep’s struggles continue to grow

Jeep woes in Australian market
Jeep's struggles in Australia continue to grow. Photo: Getty
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For an iconic automotive brand famous for building go-anywhere off-roaders and SUVs, Jeep has a chronic ability to get stuck in the mire.

The last week has been a classic example.

It unveiled its new Gladiator pick-up at the Los Angeles auto show to much acclaim, but within days that was overshadowed by a disastrous one-star Euro NCAP crash safety rating for the latest Wrangler. Five stars is the maximum.

Locally, it also can’t take a trick. On the same day that Jeep launched its much updated and improved Cherokee to Australian motoring media earlier this year, it was subject to a voluntary product recall by the Australian Competition and Consumer Commission.

The Cherokee hadn’t even made it into showrooms.

Just a few years ago, Jeep was flying high in Australia on the back of aggressive pricing for the handsome Jeep Grand Cherokee.

But a string of recalls, price rises and Jeep-acknowledged issues with its customer service and dealer network ended the love affair.

So, while Jeep booms in other parts of the world and is the engine-room of profit for the entire Fiat Chrysler Automobiles (FCA) empire, Australians are now staying away in droves.

Jeep sales slumped from a high of 30,408 in 2014 to just 8270 in 2017. They have dipped another 8.7 per cent in 2018.

The brand even took its own former local chief Clyde Campbell to court alleging financial irregularities. The case was dropped, but not until after a heap of salacious allegations had played out through the media.

Go online and you can easily find disgruntled owners complaining about the reliability of their Jeeps.

“We had two GC [Grand Cherokees] and it was the worst car experience we ever had,” Ant7 wrote on the Whirlpool Jeep forum in November.

“We spent 128K and they were total lemons. Never again. It is insulting to read some of the comments in here that we are all just making it up. If you all lived through what we went through with the vehicles and then the company itself, you would be insulted too.

“I at least have stopped many people from making the same mistake.”

One Cherokee owner generated national media coverage when he publicly destroyed his car.

Another wrote a rap: “I made a mistake I bought a Lemon Jeep,” that has had nearly 2.6 million views on YouTube.

FCA has tried to address the concerns about Jeep’s reliability by introducing a five-year warranty, lifetime roadside assistance and capped-price servicing in Australia.

There have also been strategies put in place to improve customer service locally and vehicle assembly quality at the factory source.

“They are working really hard to improve the perception in the market,” says automotive retailing expert Ross Booth of Redbook.com.au.

“They said ‘hey there is a problem with the Jeep, we will support it and we will help people out’, which is really necessary with where they were coming from.”

jeep-cherokee-piece
The Jeep Grand Cherokee on display at the New York International Auto Show in April 2017. Photo: Getty

Current Jeep Australian boss Steve Zanlunghi has shouldered the burden of turning the brand around and insists it’s now going in the right direction.

“The consideration research we have is growing pretty significantly,” he said earlier this year. “It has almost doubled year-on-year. Right now, we are looking at just over 2 per cent consideration, whereas we were at 1 per cent.

“If you can take 2 per cent of the entire Australian market that’s pretty good.”

But Ross Booth says Jeep still has a long, long way to go to before Australian buyers will trust the brand.

He says the evidence points to Jeep’s hardcore 4×4 models, like the Wrangler, retaining their rusted-on audience, while the other, wider range of more car-like models, like the Cherokee, which compete against the Mazda CX-5 and Toyota RAV4, cannot attract buyers in decent numbers.

Redbook.com.au data shows the resale depreciation of three-year-old Jeeps is more pronounced for the models that aren’t designed to be serious off-roaders.

For instance, the Wrangler’s retained value after three years and 60,000 kilometres is 72 per cent, while a Jeep Compass compact soft-roader is only 58 per cent.

“The strongest Jeeps are their 4x4s, which is what they are known for; the Wrangler and the Grand Cherokee. It drops away after that,” Mr Booth said.

“If you are ever going to buy a Jeep you are going to buy a Wrangler or a Grand Cherokee.”

“But the 4×4 market is getting smaller … if they get that segment right, it should be able to carry over into other model such as the Compass and Cherokee.”

So what does Jeep need to do to reverse the sales trend, fix its image and give buyers the confidence to come back to showrooms?

“Give me a product I can believe in, give me a product that won’t break down, give me a product that I can actually rock-hop and it will come back,” Mr Booth said.

“I think they can rebuild it. People want to believe in Jeep.”

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