Back in the year 2019, Jeep was going through a purple patch as the Brand Trust Report stated- “Jeep is India’s most trusted automobile brand.” But seeing the recent reports of Jeep that state it sold hardly 1000 SUVs per month last year, it seems that Jeep is toiling hard to regain its previous status. Now you may wonder- “Is Jeep failing in India?”
Well, the answer is not that simple! Whether Jeep will succeed or fail can be determined by uncovering its business and the scope of Fiat in India.
So, let’s dive deep into the factors that will determine whether Jeep will succeed or fail in India. Also, we will uncover the business and scope of Fiat in India.
How Jeep Entered India? A Brief History
The year 2016 was the commencement year of Jeep in India. The American automobile company entered India through its parent company i.e. Fiat Chrysler Automobiles (FCA).
The 75-year-old iconic brand stepped into India as a direct import for Indian customers. This marked a significant milestone for the American marque because finally, it established a presence in the Indian market. So, does it mean that Fiat Chrysler Automobiles was dying hard to grab Indian consumers? Yes, it is true!
Ever since India overcame the economic crisis and introduced economic reforms in 1991. Numerous foreign companies had eyed the Indian market due to its large user base. And Chrysler was one of them! It sought a foothold in India due to the rising demand and popularity of off-road vehicles.
Why only off-road vehicles? You may ask! See, the road infrastructure of India was in the developmental phase. Meaning, most of the roads were either under construction or had uneven terrain.
And for such harsher terrains, what could be better than off-road vehicles like SUVs?
Jeep’s Arrival in India
Jeep introduced a small SUV called “Renegade” in India that became quite popular within a stipulated time. The excellent features of this model won the trust of automotive enthusiasts of the nation. Thus, it helped the company to expand its reach in the Indian market.
On 1st June 2017, Jeep rolled its first locally produced model named “Jeep Compass” into the assembly line of Fiat Chrysler Automobiles’ Ranjangaon Plant, Pune (Maharashtra, India).
Jeep’s entry into India has offered a wider choice of SUVs to Indian customers. Its business was going quite smoothly and successfully. This was proved by the headline of the Brand Trust Report 2019, which stated – “Jeep is India’s most trusted automobile brand.” This report
Unfortunately, Jeep couldn’t hold this status for a long time. Yes, its fame was short-lived and temporary i.e. until 2020.
Models sold by Jeep
Wrangler 4Xe (Electrified Brand of Jeep)
Why is Jeep Failing in India?
The onset of 2020 was no less than a nightmare for Jeep! A brand that was selling over 15k units in Brazil was toiling hard to sell just 1k SUVs monthly. What led to this disastrous fall of the company in India? You may ask. There are not just one or two but many reasons behind it.
Let’s look into the reasons one by one-
1. Premium Market Positioning & Over-Pricing
This strategy sounds to be quite effective for raising the brand value but it is not suitable for the long run. To the uninitiated, let me explain “Premium Marketing Positioning” in simple terms.
It is a marketing strategy where a product or service is positioned as high-quality with sky-high prices. This method targets affluent customers who are willing to pay a premium price. It focuses on emphasizing superior features to create a perception of luxury and value. This positioning strategy aims to differentiate the offering from competitors, build brand loyalty, and maximize profits.
By targeting a niche market segment willing to pay more for perceived excellence, Jeep hoped to gain a sustainable competitive advantage.
Unfortunately, this strategy of Jeep backfired and it couldn’t garner any big sales numbers.
2. Relying on a single product for garnering sales volume
Jeep got a positive ray of hope with the made-in-India Jeep Compass that was launched in 2017. This model grabbed a large number of customers and sold over 25k units in consecutive years. So, the FCA’s Ranjangaon facility (Pune) became the production hub for Compass’ RHD version.
But Jeep has made a major blunder in this whole scenario. It relied on a single product i.e. Jeep Compass for amassing the sales volume. Consequently, it led to low efforts on innovation. During the second half of 2019, the sale of Jeep Compass fell drastically.
While Jeep was stuck with its Compass model, the competitors continued to launch new products. Eventually, the sale of the Jeep Compass slowed down. Seeing this retard growth, Jeep again put its focus on innovation and introduced new variants and special editions of Compass. But still, the sales volume figures of Compass didn’t improve.
Look at the unit sales of Jeep Compass-
|Year 2017-18||25,000 units|
|August 2019||605 units|
|August 2020||468 units|
If you compare the number of unit sales of Jeep Compass and Ford Endeavour, you will be surprised. Why? Because despite being more expensive, Ford Endeavor recorded 637 unit sales as compared to 468 unit sales of Jeep Compass.
The absence of new products of Jeep over the last three years massively hurt the sales volumes of Jeep in India.
3. Disruption of Brand reputation due to break-down of new Jeeps
In the last two years, Jeep recorded a high number of complaints related to the breaking down of the Jeep Compass. And that too within the first week of the delivery. Apart from that, Jeeps is also facing numerous complaints related to its technical issues. Many customers complained that they had to repair the vehicle multiple times after the purchase.
Jeep’s Strategy to reboot its presence in India
This marque is planning to gain a strong foothold in the Indian market. And that too amid falling sales, the high cost of owning the brand, cut-throat competition, and falling market shares. Jeep was left with no other choice than to tweak its strategies.
Some of its major strategies are-
1. Diversify the Portfolio
The new management team of Fiat Chrysler has decided to invest $250 million in India. Reason? To diversify the portfolio by launching new SUVs under the Jeep brand. They are planning to-
- Locally manufacture mid-size and three-row SUVs
- Assemble the Jeep Wrangler and Jeep Cherokee vehicles
- Launch a new version of the Jeep Compass
Currently, FCA’s market share is less than 1% in the Indian market in the segment of passenger vehicles. The addition of new vehicles to the portfolio will help the automaker to increase the local sourcing of components. Thus, it will help the company to scale up the economy, reduce costs, and boost-up sales.
2. The new leadership team in India
In May 2023, Aditya Jairaj took charge as deputy managing director of Stellantis Group in India and head-Jeep brand operations. The management team is planning to transform the mobility landscape in India.
The vision of the new leaders includes-
- Pushing the brand towards electrification on a global scale to reduce carbon emissions.
- Increasing revenues across the globe and especially from India
- Launch a new compact SUV named Citroen C3 Aircross
3. Discontinuing some low-end Petrol Variants
This is the most important part of the revival plan of Jeep. The company has decided to discontinue the petrol-variants of the vehicle and stick with diesel. Really? Yes, it’s true.
Doesn’t this sound quite odd? Because petrol and hybrid variants are quite popular in the Indian market.
Then why Jeep is discontinuing petrol-fuel vehicles?
Because its petrol variant vehicles with 1.4-liter turbo engines failed to meet the pollution control norms of India.
Thus, Jeep halted the petrol variant of the Compass in April 2023. This occurred after the implementation of BS-6, phase-2 emission norms of India.
4. Launching new financing schemes and better outreach
The company is aiming to reduce the initial purchase ownership cost. It is a part of making the price-to-value more alluring for the customers. With better marketing strategies and outreach, it is planned to communicate the brand value to the end consumers. They aim to make you understand the value-for-money feature of Jeep vehicles. So, is Jeep failing in India? Look into the next section to get the answer.
Final Words: Is Jeep Failing in India?
Now, here comes the final part. As you have seen above, Jeep went through numerous tough circumstances. And to fight back, it introduced several strategies.
Before coming to a conclusion just look at the recent updates of Jeep. The company boosted its sales in the CY (Calendar Year) 2022. There has been a significant improvement in sales if you compare the number of units sold by Jeep in the last two years. It sold 13,263 units in the year 2022. In CY 2021, it sold 11,652 units.
You can say that despite facing massive failures, Jeep’s strategies for reviving the brand were quite effective. Thus, you can say that Jeep is not failing in India!