Stellantis North America, the parent company to the Jeep brand, released its second quarter sales results this week, and the press release tries to paint a rosy picture with growth and sale increases. So why are there reports of Jeep production cuts and plants going on hiatus?
This could simply be the mid-summer slump we see across the industry as kids are out of school and families take vacations. But we think it’s a little more than that.
Jeep production cuts, closures
The Stellpower.com blog has reported two separate plant stoppages that build Jeep products: one in Toledo, Ohio, and one in Warren, Michigan. The affected Jeep products are the Gladiator, Wagoneer and Grand Wagoneer. The blog states that the Toledo plant is closed to retool, potentially prepping for the anticipated Gladiator 4xe, a plug-in hybrid powertrain. And the Warren plant has gone down to a single shift due to vehicle demand.
While Gladiator sales have started to tick downwards, by all accounts the Wagoneer and Grand Wagoneer have had 107% and 24% year-over-year sales increases, respectively.
So, what gives?
First off, July is a slow month. It just is. And the Stellpower.com blog does say the Warren plant shift change is supposed to be just for July.
Second, Stellantis generally and Jeep specifically has entered a bit of a product stall. Yes, the Wrangler and Gladiator got a refresh in 2024, but it was mild. And yes, the Wagoneer and Grand Wagoneer were all-new for 2022. But, in the world of immediate gratification, what has Jeep done for us lately?
OK, we’ve seen the introduction of the all-electric Wagoneer S. And we know the Recon EV is expected soon. But tick tock, what do you have for me now?
Nothing.
So, what’s the deal?
As we reported a couple weeks ago, Stellantis is going through a bit of a clean-up period. CEO Carlos Tavares is trying to cut costs and clean up what he deems as a mess at the plants. He wants to focus on electrification, and he wants to compete with China on a global scale.
Therefore, what we’re seeing is a company in transition. Stellantis hasn’t had any all-new products in its lineup for a while, and we’d argue that – rather than the strikes in 2023 – is why the automaker hasn’t had an appearance at recent auto shows. But, on paper, there’s a lot of product on the horizon.
With regard to Jeep specifically, we think the attempt to rebrand with more upscale and expensive vehicles (a la Grand Wagoneer) didn’t go as planned. There’s a reason Wagoneer sales increased by triple digits and the Grand Wagoneer did not. As the brand went upscale, prices for all its vehicles trended upwards as well, and the least expensive model, the Renegade, has been discontinued.
All of that has hurt Jeep, and (channeling my inner Desi Arnez), Stellantis has some ‘splaining to do.
The bottom line
Yes, the situation looks bad for Jeep generally and Stellantis specifically. But you have to give the automaker some time to regroup. A 4xe Gladiator and inexpensive all-electric base model might be just what the doctor ordered.
So, stay tuned.
