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Jeep Grand Wagoneer: Wise move or wishful thinking?

by Bill Cawthon on

News analysis by Bill Cawthon

Sergio Marchionne has announced the revival of the Grand Wagoneer name for an upscale, seven-passenger, boat-towing SUV for 2013. The new vehicle will go beyond the Jeep Commander to compete with premium brands like Cadillac, Lincoln and the imports.

In a time when the term is overused, the Grand Wagoneer really was an iconic vehicle. It defined the SUV as practiced today. It remained in production, and popular, for an almost incredible 28 years on the same platform, the longest run in automotive history. Along with the BMW, it was the automotive symbol of the Yuppies in the 1980s. It was a handsome vehicle with honest styling that never changed except in minor details.

I have the greatest admiration and respect for Sergio Marchionne and Mike Manley. I am also sure that Ralph Gilles will produce a good design and that Olivier Francois will have a good marketing plan. In fact, it’s most likely the new Grand Wagoneer will be another impressive product from the team that has recently delivered a number of impressive products.

But the question must be raised: Is there a sustainable market for it?

A lot has been made of the resurgence in light truck sales and it is real: In December, light trucks captured 54.3% of total light vehicle sales, up 4.6 points from December 2009. For the year, light trucks led with 50.2% of sales compared to 47.3% a year ago. Big SUVs also got a nice bump, up 13.9% compared to total industry growth of 11.1 percent.

But when it comes to another big American SUV, there are a couple of flies in the ointment. For the first, let’s go back another year, to 2008, when skyrocketing gas prices gutted the light truck market. Compared to 2008, 2010’s total light vehicle sales were down 12.5 percent. Sales of large SUVs were down 22.5 percent and sales of large American SUVs dropped 22.7 percent.

Worse, sales of American luxury SUVs, like the Cadillac Escalade and Lincoln Navigator fell 32.3% and only recovered 7.04% from 2009 to 2010. Total sales of American luxury SUVs came to just 33,737 units in 2010. That’s the second fly: the growth is almost entirely due to import brands, like the Audi Q7, Infiniti QX56 and Mercedes-Benz GL-class. The market for big American SUVs is contracting. The shrinkage is small, measured in small fractions of a percent, but the SUV’s market share is small and the trend is there.

The original Grand Wagoneer was never a high-volume vehicle. From the time when production data became available (1974), peak production of 28,871 units was in 1978, and average production was 16,223. That’s still about 5,000 units more than the average volume for luxury American SUVs in 2010.

It may be more sensible to aim the Grand Wagoneer straight at the GMC Yukon and Yukon XL. They’re the ones that have fared the best over the past few years. Volumes are good: GM sold 28,781 Yukons and 23,797 Yukon XLs in 2010; there’s room for a capable competitor and Ford isn’t playing there any more. Even when gas prices torpedoed the big trucks in 2008, volume for the Yukons fell less than other premium American SUVs.

Positioning the Grand Wagoneer with the Yukon won’t challenge consumer perceptions. Sending a Jeep out to do battle with Cadillac is going to be the automotive equivalent of the Charge of the Light Brigade (for those unfamiliar with the Charge of the Light Brigade, let’s just say it didn’t turn out well). Cadillac has a cachet nurtured over years and Jeep, while it’s upscale, doesn’t have the perception as a luxury brand.

In a gunfight, a shot that’s aimed too high is called a miss. Better to aim smack-dab in the middle and get a solid hit.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.

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