Selling Jeep: why it can’t happen and how it can happen
Analysts and autowriters are falling over themselves yet again to talk about how Chrysler could sell Jeep. Partly that’s just to reuse their old “Daimler’s selling Jeep” stories, I suspect; partly it’s because Mahindra is coming to America, with their own vehicles that share common spiritual ancestors.
As a company, Jeep cannot really be split off from Chrysler. Yes, production is (aside from Patriot and Compass) unique to Jeep; the Dodge Nitro is part of the Liberty production line, but it’s not a major vehicle and could be dropped easily enough. The hard part is the shared engineers and components. Jeep is intertwined with Dodge Truck quite thoroughly. It would take a long time to separate Jeep from Chrysler, not that it couldn’t be done with enough time, money, and focus.
But who would really want (and be able to buy) Jeep? Toyota already has an offroad reputation thanks to the 4Runner and Land Cruiser. Ford has marketed its vehicles as being off road ready, and doesn’t need vehicles that can actually go offroad without major modifications to reap the benefits of their years of marketing. GM is trying to get RID of Hummer completely, buying dealerships to avoid lawsuits. Honda rarely buys anything they didn’t invent.
Wall Street seems to think Mahindra or Fiat will buy Jeep - but why would they? Mahindra makes Jeeps already… perfectly suited to their market and far better suited than Jeep itself to higher gas prices. Fiat… they’d be nuts to go into an area so far from their home turf. But analysts don’t think like that; after all, they were very happy with Daimler ruling over Chrysler until the end. (See our earlier Wall Street blog.)
There is one possibility, though.
A more than usually knowledgeable reporter pointed out to me that the Jeep name could be sold without actually selling Jeep. Say Mahindra were to pay, say, $400 million for the name, which has a global reach. Mahindra has the products; they don’t have the name recognition outside of India. They could perhaps buy the Wrangler plans and plants; or perhaps not. It would not really be needed. Chrysler could simply drop the Wrangler and its unique platform, close down another factory (something which analysts always like). The Patriot could be renamed, the Caliber and Compass merged. The Liberty would be dropped and anyone who wanted one would be steered to a Nitro until the factory could be shut down. Finally, the Grand Cherokee is supposed to merge platforms with Durango anyway; so the name could be dropped and Durango would carry the torch. Chrysler would then have just two brands, with Dodge being its Toyota and Chrysler being its Kia.
It’s possible. It’s still not likely, but it’s possible.
