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Gladiator sales projections???

Discussion in 'Mopar / FCA News' started by CDJSalesPro, Mar 13, 2019.

  1. HotCarNut

    HotCarNut Defender of Reality
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    It's definitely kept me from buying one, although I wonder if the AEV lift and high-steer kit I would do might help correct it. My concern is that if it's truly a software issue, nothing I do mechanically will help.
     
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  2. aldo90731

    Staff Member Level III Supporter

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    Yeah, it kept me from buying, too. For two years.

    I put off buying one for as long as I was able to. When it came down to buying one, I test drove the heck out of them and picked one that “didn't feel too bad.”

    Part of my rationale, like yours, was that eventually I’d replace the factory steering components with better aftermarket ones, which would only help.

    I wanted to avoid putting myself in the situation where I’d have to take the JL back to the dealership right away because I didn’t like/couldn’t handle how it drove. That wasn't going to end anywhere good.

    Overall I am very happy with my JL: I enjoy driving it, love the color, and got an amazing deal on it. But boy I never had to search so hard, test drive so many Wranglers and kick so many tires before.

    At the end of the day, that’d be my advise to anyone looking to buy a JL: if you really want one, test drive several, pick one that you feel drives acceptably and buy that one. Don’t go into it pretending the issue doesn’t exist; it is only going to come back and bite you. And DO NOT factory order; there’s zero guarantees that a factory order will drive like the one you drove off the lot.

    Fortunately, the steering doesn’t appear to be an issue with JT. The issue there is figuring out what is a truck like that really worth...?
     
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  3. HotCarNut

    HotCarNut Defender of Reality
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    Apparently $8k less than sticker for a Rubicon...
     
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  4. valiant67

    valiant67 ...

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    The 2018 JLU I had for an extended rental while the Renegade was torn apart was a flawless handling vehicle for the 2500+ mile "extended test drive" from PA to FL and back through north GA to PA.
    This one was a 4 cylinder Sport. When it became obvious the Renegade still had issues, they asked me if I was interested in a JL. I told them if the one I rented was available, I'd take it. It wasn't. Drove a couple others and ended up in a Grand Cherokee.
     
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  5. aldo90731

    Staff Member Level III Supporter

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    Indeed. That is today, only 9 months after launch.

    At this rate, my hunch is that a year from now it will be worth $10,000 off MSRP, and year after that $12,000 off MSRP...
     
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  6. Dave Z

    Dave Z It's me, Dave
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    It does appear that Bob Sheaves' assessment of the actual demand for the truck may have been accurate (40,000 per year, globally, all sourced from Toledo, at reasonable profit - sustainable number over vehicle lifespan).
     
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  7. valiant67

    valiant67 ...

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    Wrangler production of somewhere around 220k plus 40k Gladiators might leave a bit of excess capacity in Toledo though.
    Those are US numbers. Despite the thought exports were severely restricted on JK due to capacity, I haven't seen JL mentioned as having significant export numbers.
     
  8. Dave Z

    Dave Z It's me, Dave
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    If there's excess capacity, either have fewer shifts or more products... haven't we learned that discounting to meet capacity fails in the end?
     
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  9. aldo90731

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    IMO, JT was an excellent idea that got mired in greed.

    There appears to be demand for a lifestyle truck like Gladiator, that has the chops to do real truck stuff. But the market appears to be balking at the prices FCA has come up with.

    FCA has to do some serious introspection and figure out the true cost of running the plant at a higher level of capacity and bringing in somewhat lower unit margins, vs struggling to push for a lower volume at prices few buyers and dealers are willing to accept.

    The good news is that Jeep appears to have plenty of room to adjust margins and prices. The bad news is that the asylum inmates appear to be running Jeep pricing at the moment.
     
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  10. Dave Z

    Dave Z It's me, Dave
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    If you start with a very high price you do maximize profit. But then you either have huge rebates or a big price cut. Either one pisses off early buyers. It's better to have long waiting lines. They could have sold the PT Cruiser or Viper at $5,000 above the original MSRP but then the early buyers would have truly been annoyed and resale value would have been very poor. Any leases are hurt by resale, too.

    'Course we don't know the actual cost, including the engineering. But ... it's better to not gain a bit of money up front than to permanently lose customers.
     
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  11. link3721

    link3721 Yes, This MK Goes Off-Road

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    True, but then you run the risk of dealer markups that also piss people off. I guess in that case at least it would be on the dealers and not FCA.
     
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  12. Dave Z

    Dave Z It's me, Dave
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    Yes, and some dealers do very well from that. During Viper mania and then PT Mania, a few dealerships managed to make a name for themselves as being honest and customer friendly, on a national scale. It also feeds into the product hysteria to have waiting lists of customers rather than cars sitting on lots waiting FOR customers.
     
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  13. gminnebo

    gminnebo Well-Known Member

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    But the Darts did have a steering issue which took almost 2 years to resolve (update to the software), mine vibrated something awful at highway speeds, they ran me through half a dozen rebalancing and alignment attempts (on their dime), it didn't get fixed until FCA release the software update.
     
  14. Dave Z

    Dave Z It's me, Dave
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    Mine never had that as far as I know - odd. That was from the steering?
     
  15. aldo90731

    Staff Member Level III Supporter

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    That is why economists say when supply and demand intersect that they are in "equilibrium."

    [​IMG]
     
    #535 aldo90731, Jan 29, 2020
    Last edited: Jan 29, 2020
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  16. Ryan

    Staff Member Level III Supporter

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    There's $2,000 bonus cash on certain Wranglers and Gladiators right now.
     
  17. gminnebo

    gminnebo Well-Known Member

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    [QUOTE="Dave Z, post: Mine never had that as far as I know - odd. That was from the steering?[/QUOTE]

    yup, you can jump over to the Dodge Dart Forum and read all about it...

    Here's the TSB info:

    SUBJECT:
    Flash: Steering Wheel Vibration At Highway Speeds On Smooth Road
    OVERVIEW:
    This bulletin involves road testing and updating the software in the Electric Power Steering
    (EPS). If required road force balancing and match mounting the tires and wheels.
    MODELS:
    2013-2014 (PF) Dart
    NOTE: This bulletin applies to vehicles built on or before February 09, 2014 (MDH
    0209XX)
    SYMPTOM/CONDITION:
    A customer may experience a slight shimmy/shake in the steering wheel at speeds of 50 to
    70 MPH (80 to 120 KPH). This is most noticeable on smooth roads. This should NOT be
    mistaken for a normal tire vibration felt in the seat and steering wheel or at low speeds.
    DIAGNOSIS:
    SPECIAL TOOLS/EQUIPMENT REQUIRED:
    1-RF33 Hunter GSP9700 Road Force® Diagnostic Systems or
    equivalent.
    REPAIR PROCEDURE:
    1. Road test the vehicle at highway speeds between 50 to 70 mph to verify customer
    complaint.
    2. Was a vibration exhibited at the steering wheel?
    a. Yes >>> Proceed to Step #3.
    b. No >>> Check for updated software for the EPS module, proceed to Step #12.
    3. Inspect tires and wheels for damage, mud or snow packing.
    Continues… (the instructions continue on but for reading space it's abbreviated)

    NUMBER: 08-041-14
     
  18. Dave Z

    Dave Z It's me, Dave
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    Huh... I'll go see if that's been done on my car
     
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  19. aldo90731

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    Here’s a better explanation of how supply, demand and equilibrium work:

    Demand for Gladiator is the downward sloping curve. This makes sense: as price goes up, volume goes down. Demand is fixed. Over time, FCA can try to shift demand outward by doing significant things, like deliver amazing product quality, superior customer service, or sustain marketing that is relevant and effective.

    Supply is the positive sloping curve. FCA can more directly impact supply. It can try to shift the supply curve outward by increasing production capacity, flooding the market with inventory, etc.

    However, attempting to increase supply without a corresponding increase in demand, presses these opposing forces to find a new equilibrium point (i.e., intersection). Notice that for this new equilibrium to exist, price has to fall.​

    [​IMG]

    My hunch is that FCA had estimated JT’s demand curve sat farther out than it does. In fairness, for a product that is brand-new to market and so unique, estimating demand can be like throwing darts in the dark. Add to that a dose of executive wishful thinking, and it’s easy to see how FCA might have overshot.

    However, providing buyers with a sense of value for money is an integral step in this process. Value for money is a very subjective but extremely important attribute. The higher Gladiator’s MSRP was set, the harder it was going to be for FCA to provide buyers with a solid sense of value.

    From what I have seen, FCA attempted to generate value in three ways:
    1. Through the product itself —design, capability, performance, removable top/doors, etc.
    2. Through the Jeep brand name and connection to Wrangler —brand heritage, reputation, brand loyalty, iconic looks
    3. With the launch marketing campaign —advertising, press reviews, Launch Edition, etc.
    In now typical fashion, though, when it came to generating value FCA failed to leverage two very important levers:

    4. Excellent product quality*
    5. Superior customer service​

    While it is true that it is a bit early to objectively assess JT’s product quality, this is one area where Jeep’s quality reputation and JL’s niggling issues didn’t help.

    With regards to superior customer service, well that becomes obvious the moment customers step into the showroom. In fact, I’d argue that by setting MSRPs so high and creating such need for haggling, FCA is also creating plenty of opportunity for customer service to go downhill very early, really fast.

    FCA shows this distinctive pattern by which it always tries to rely solely on items 1 through 3 to create value, ignoring 4 through 5. Omitting the last two not only leaves FCA with a competitive handicap, but the higher it drives MSRPs, the more necessary they become.

    —————————————————
    *The same can be said of the Alfa Romeo launch
     
    #539 aldo90731, Jan 30, 2020
    Last edited: Jan 30, 2020
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  20. valiant67

    valiant67 ...

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    And to add to Aldo's discussion of supply and demand above, there are also graphs for maximizing profit. Maximizing profit comes at the point where marginal cost = marginal revenue. You can't make too few, or marginal cost is high. You can't make too many, or marginal revenue is too low.

    Fixed costs are a huge part of the cost structure in the auto industry. That's why volume is still extremely important (up to a certain point).

    I'd say more, but this is an auto board, not an Econ class.
     

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