I read that article. Overall much improved, but the detuning of the powerplant for whatever reason was one of the knocks, like I thought it would be. My Compass rental is a very nice ride, but the two places it needed improved seems to have been addressed. The engine and transaxle. But, like many things from FCA unless it contains 700 hp, it just misses the mark.

 

That's the only thing that I hate about the 2.0L. It sounds horrible. The version in the Wrangler is powerful though. It definitely gets out of its own way.

I fixed the sound issue on my Wrangler by installing a Borla exhaust. The exhaust takes my mind off of the engine.

 

I suspect they wrote the review and then drove the car, but that's just me.

 

Dave, have you been in one yet? Just curious if someone here has gotten to try the new powertrain yet.

 

2023 Jeep Compass First Drive: Moving More Quickly in the Right Direction With a Turbo

A more powerful new turbo engine and improved transmission continue its march of improvement.

www.motortrend.com

Another review for "review". Seems a bit more positive

 

Sounds like they've addressed 2 of my complaints about the Compass, Inadequate power and unnecessarily harsh ride.

 

Both reviews say the suspension and transmission are improvements.
Both reviews fall short of praising the engine.

I really do not understand why they handicapped this engine so much.

Ford has been doing a 2.0T for Escape, Bronco Sport, Fusion, etc. with 250hp for a decade on regular gas and gets the only 1 mpg less on the highway (combined is the same as the Compass)

The Escape is also cheaper than the Compass which now over $48k in loaded Trailhawk trim. Escape Platinum is just over $42k.

This is also why Jeep should not be trying to compete against Escape and Bronco Sport at the same time. Let Compass take on Bronco Sport. Let Chrysler/Dodge take on Escape.

 

Both reviews say the suspension and transmission are improvements.
Both reviews fall short of praising the engine.

I really do not understand why they handicapped this engine so much.

Ford has been doing a 2.0T for Escape, Bronco Sport, Fusion, etc. with 250hp for a decade on regular gas and gets the only 1 mpg less on the highway (combined is the same as the Compass)

The Escape is also cheaper than the Compass which now over $48k in loaded Trailhawk trim. Escape Platinum is just over $42k.

This is also why Jeep should not be trying to compete against Escape and Bronco Sport at the same time. Let Compass take on Bronco Sport. Let Chrysler/Dodge take on Escape.

Maybe it has something to do with the driveline. Maybe it's not designed for 250hp. Just speculation. I'd love to give you guys a report on a new one, but mine isn't. It does however have 35k miles on it and it's still rock solid and squeak free.

 

That's true, if you criticize a vehicle on a sponsored drive you don't get another sponsored drive.
The transmission's been used for years in Hyundais... but the programming is key. Glad it's been sorted out.
Things work better without Sergio scheduling.

 

Things work better without Sergio scheduling.

I think Sergio’s MS Outlook didn’t work...

 

When the next Compass comes on STLA Medium, they need a Chrysler and Dodge version as well.

Let Jeep be premium priced and go after the off-road capability crowd.
The Dodge will become the replacement for the Hornet
The Chrysler should go up against Escape, Rav4, etc as the mainstream budget offering.

 

My brother and sister-in-law just traded their 2019 Compass for a 2023 Bronco Sport. Their Compass was relatively trouble-free, but they never really cared much for it. Worse, they didn’t trust it after the similar 9-speed automatic transmission on their 2015 Renegade croaked the week the warranty ended - suddenly, they were out of options and the dealer practically forced them into a Compass.

They took the Compass but never forgot the quality issues with their prior Jeep, or how the Jeep dealer handled things.

When the end of the warranty on their Compass approached, they decided to preempt things by dumping it before they found themselves in a similar situation. And, by that point, even though they had owned Chrysler products for the prior 31 years, buying another Jeep was pretty much out of the question.

My educated guess is that part of the steady decline in sales we are seeing across Jeep’s junior models comes from disenchanted owners leaving the brand. Jeep introduced Renegade and Compass as a step into the brand, and the strong allure of Jeep brand did lure many people in. But between the lackluster driving experience of these vehicles, the spotty quality, and the terrible dealer experience, Jeep is now unable to stem the tide of defection. Add to that Jeep’s delusional pricing, and these Jeeps are simply a non-starter for many buyers.

Like @Adventurer55 says above: unless you have 700 HP —or something unique like a front solid axle, there’s little reason to buy a Stellantis product these days.

 

My educated guess is that part of the steady decline in sales we are seeing across Jeep’s junior models comes from disenchanted owners leaving the brand. Jeep introduced Renegade and Compass as a step into the brand, and the strong allure of Jeep brand did lure many people in. But between the lackluster driving experience of these vehicles, the spotty quality, and the terrible dealer experience, Jeep is now unable to stem the tide of defection. Add to that Jeep’s delusional pricing, and these Jeeps are simply a non-starter for many buyers.

Like @Adventurer55 says above: unless you have 700 HP —or something unique like a front solid axle, there’s little reason to buy a Stellantis product these days.

So, by trying to make Jeep all things to all people, they have instead dragged the brand downward and damaged its reputation? Gee, if only there were other more mainstream brands that could have vehicles like these in their lineups instead.

And you mean to say that the short term pursuit of margins over the health of the brands has come back to bite them?

 

CUSW (used for Dart, Cherokee and Pacifica) is so bad that FCA reached back even further for a platform to be used under the Renegade/Compass, SUSW, spawned from a joint venture with GM where Fiat was so bad GM bought out the partnership with $2 billion to get rid of Marchionne.

...and you wonder why GM rebuked all of Sergio's attempts at a takeover.

 

My fear is that Stellantis will impose a string of generic products onto the highly profitable N.A. market, PSA's clean design language notwithstanding.

A key problem with FCA, and now with Stellantis, is that the shots are being called from Europe which, despite its engineering prowess, is a difficult market in which to make money.

From where I am sitting, the European market is a sea of generic products by brands with a long heritage that cut along national identities. This allows European automakers to compete with one another on brand differentiation more than on product differentiation. Some blame strict EU regulations for the vanishing differentiation across European automobiles, which is perhaps a key factor.

Jeep makes its profits from its uniquely N.A. products: Wrangler, Gladiator, Grand Cherokee and Wagoneer, and Ram from fullsize pickups. These vehicles would be difficult to justify anywhere else.

 

All Stellantis has to do is look at the complete failure of European management of American auto companies. AMC, Renault finished them off. Why? Forcing AMC to produce products that weren't up to specs for the US. Daimler, IMHO took Chrysler's cash they'd put aside for future products and left the company on the side of the road to die. Fiat, started out okay, but got cold feet when they screwed up the Dart and 200 and just quit. Said well find a merger partner. Now, if the Europeans give the NA arm enough cash and can fill the engineering gaps that are still left I'm sure with competent people, they might be okay. It's a work in progress.

 

I posted this elsewhere...

1) Jeep is now at 120 day inventory supply, second highest in the industry.
2) Jeep has lower quality than Land Rover
3) Jeep has its highest transaction prices than ever
4) Jeep has the lowest average fuel economy of any SUV lineup
5) Jeep has some of the highest and lowest residual values of any SUV
6) Jeep has the lowest customer retention rate
7) Jeep dealers rank lowest in Customer Satisfaction

High fuel prices
Buying power shrinking
Recession coming


Perfect storm brewing

 

I will say that I'm really surprised that with all the resources Jeep is afforded by the company, they did not plan a replacement for the Cherokee which was a strong seller in a very competitive segment. I'm worried for the company as a whole right now because they're very precariously positioned with all their eggs in high profit, high price vehicles when we are standing on the precipice of another major recession with rampant inflation and rising interest rates. With no volume sellers that move a lot of product at lower margins, Stellantis is very vulnerable to a market downturn.

 

In other words, they are repeating the same mistakes in the CUV market that they did in the compact and midsize sedan markets. Nothing was learned from the disgraceful hissy fit that was the dropping of Dart/200.

 

Tavares says that exfca n america breaks even at 40% of current sales. Ie the recession is of no concern as long as the rate of cost cutting is faster than the loss of (exFCA's leading hugely) pricing power.

Stellantis, nee fca n america, does not do hypercommoditized models or brands. It is a fool's errand trying to compete with toyota kia etc in high volume low margin segments GIVEN the EPIC strength of the us$. (The issue remains cost competitiveness, adjusting for legacy weak brand equity for such segments nameplates and for chrysler brand and awful dealers etc) IF made in n america esp usa with low import net-content.

Besides, they've timed it well for this recession since THAT is what marchionne was prepping for all along: earn cost of capital IN and THROUGH the post2008 business cycle etc. Arguably that cycle is finally at an end shortly (ie money printing bailouts and stimulus is done.)

Renagade Compass now Hornet soon Ram 1200, because NOT made in usa, will provide lower price yet positive margin sales even if this deferred 'recession' gets nasty (which it won't?)

 

We’ve heard that song and dance, including the disdain for the American brands somewhere before…

 

No disdain, just the 'structural' facts of the market matter...just an accurate paraphrase of what Tavares (the ghost of Sergio?) Said explicitly during the latest earnings call: a week ago. Esp the bit about being industry best not just at profits, and margins in n america but especially at: such a low breakeven point, a mere 40% of current sales.

 

There is no way 40% of current sales is a sustainable volume long term unless you go the Sergio method of running every North American product into the ground without refreshing or replacing.

 

Agreed. But that is why volumes may be cut, layoffs etc aka cost cutting faster than 'loss of pricing power' which is one definition of 'commoditization'....BUT not the rationalized ie reduced and focussed and admittedly delayed portfolio of nameplates, hopefully including the Chrysler ev s, the Ram rev, Ram 1200, Banshee etc

 

For comparison: just how many models and nameplates and workers (and global markets ex n america) have GM and Ford HAD to rush to cut during (or rather:too late, well after fca had already prepared) this SAME allegedly baleful marchionne period?

How are GM and esp FORD going to fare IF a real sales and profitability recession occurs now that the pandemic stimulus plus post2008 free money qe etc is over?

As opposed to exFCA?

Point is: they are and have been under marchionne ALSO working to ensure a low 'breakeven' or 'survival' point. Tavares says it is as low as 40% of sales. He IS focusses on that number: that much is clear from the earnings call.

For companies like exFCA GM and Ford, survivors of 2008 bankruptcies etc as well as PSA (bailedout by French state and Chinese state firm in 2013) they HAVE to be very very careful with new models, brands, plant capacity etc, only more so due to climate change electrification etc transition fresh investments.

 

I personally believe the one miscue Carlos is making is not appointing a good CEO type for NA. I'm not sure the motley crew that's supposed to be in charge has a clue the daunting task that lies ahead. Dodge is a real lost soul. They've been milking the Hellcat for years, and now they are forced to change. Popcorn time, sit back and enjoy the sad show.

 

Mark Stewart is coo N America.

BUT Manley left or was forced out when the merger with PSA was done. He was rumoured to be 'Head of Americas' ie fca n america and latam initially

 

Just because there is a name doesn’t mean there is a leader.
I haven’t heard him say anything other than “we can still be much smaller and survive” (paraphrasing).
AMC believed that too. So did Plymouth.

 

Or rather: i have 'pricing power' aka less commoditized sub/brands in n america (thanks to Marchionne & co)....

Which has peaked and will now erode (fast or slow?)....

Meanwhile i will cut costs regardless but in any case: faster....

Even as all/new models nameplates and ev s etc will be launched (thankfully 'delayed'!) And brands re/re/oriented (Dodge and Chrysler).....

All very thankless financially, nevermind epic current profitability....now that cost of capital has risen. Look at where GM and even Stellantis shares languish in wall street (gross under)valuation. Their future's at a discount as it were!

 

Pricing power? That’s a bit of a stretch as we see they can’t hold the price increases they were able to pass during parts shortages.
Now the inventory is growing and discounts also growing.
You can’t shrink your way to long term profitability in a business with such high overhead. FCA tried and all it brought was an incredible lack of new product which did far more to damage the American brands than any previous management.
FCA’s secrets to profit was to stop product development, screw dealers on reimbursement rates for warranty work, and hurting customers with low quality cheap parts.

 

....as much as ever.

Good thing is that Stellantis has strong longterm 'family owners'.

Hope GM, which has none and not much wall street cred left either, has a good enough upcoming recession?!

 

GM has plenty of credibility, high quality, and highly rated dealerships, not to mention a boatload of cash. GM has engineer Mary Barra at the helm and won't be floundering this time around, trying to cut their way into growth. No worries about GM.

I would not assume that what happened yesterday at FCA will happen tomorrow at STLA. Real change takes time. You could have written some of this in 1990 when many predicted Chrysler's imminent bankruptcy, and yet in 1996, Chrysler was booming.

I will absolutely agree that keeping the 200 and Dart in Belv. with Cherokee would have made perfect sense since they all shared a platform and it was a flex plant. They could have had 60,000 each sales of 200 and Dart and done just fine.

Part of the problem is how long it took to get the new engines. I suspect they don't have the programmers to put the new engines into that many new vehicles at once. Sergio rushed them and got glitches.

 

GM has plenty of credibility, high quality, and highly rated dealerships, not to mention a boatload of cash. GM has engineer Mary Barra at the helm and won't be floundering this time around, trying to cut their way into growth. No worries about GM.

I would not assume that what happened yesterday at FCA will happen tomorrow at STLA. Real change takes time. You could have written some of this in 1990 when many predicted Chrysler's imminent bankruptcy, and yet in 1996, Chrysler was booming.

I will absolutely agree that keeping the 200 and Dart in Belv. with Cherokee would have made perfect sense since they all shared a platform and it was a flex plant. They could have had 60,000 each sales of 200 and Dart and done just fine.

Part of the problem is how long it took to get the new engines. I suspect they don't have the programmers to put the new engines into that many new vehicles at once. Sergio rushed them and got glitches.

GM has downsized globally (exited opel and europe, india, australia etc), and cut sedans etc, and expensively unnecessarily brought forward huge ev (actual models not just r&d or tech) and autonomous driving investments. Meanwhile its only large non n america exposure, China, has been yielding little in the last few years and seems at-risk given geopolitics, xi jingpin arbitrary extreme policy centralization etc.

It had to do all this in a rush in the 2 years before pandemic stimulus+qe, while also propping up its share price via buybacks.

This suddenly AFTER smugly saying no to any consideration of Marchionne's formal merger offer..."we don't need to....we are busy and successfully merging with ourselves..."

This was the 3rd time GM has avoided the inevitable, merging for scale economies: failing to acquire FIAT group (then including ferrari new holland iveco....) when Marchionne offered it up (cost GM 2billion $ not to....only to have opel end up in stellantis lap in the end in any case) AND then again during 2008 when they, including bob lutz, refused to takeover Chrysler Corp as part of bailout (before marchionne and fiat were in the mix)

Since then GM has done nothing but shrink, have dismal returns on capital since 2008...and is now as perilously just n american market dependent as....FORD, with just a few pickups and suv s that make money.

And so: vulnerable to a sales and profits recession. Against that are the large subsidies from us govt for ev transition etc, so yeah share prices will stay....exactly where they were : in 2008!

Ie., when marchionne asked gm ford vw hyundai et al : do you earn your cost of capital OVER the business and economic cycles?

GM and Ford's answers are in: of course not!

The opposite is of course true of exfca pre and esp now post merger.

I believe if the GM merger had happened or even the hostile takeover bid by marchionne (which was indeed fully financed and ready to go before being cancelled by john elkann):

Gm platforms engines ev tech would'v been deployed and amortized over hugely greater GLOBAL scale including opel and china and latam: instead of needing giorgio for jeep alfa dodge and maserati now even chrysler ev s, the gme engines, the delayed ev. rollout, the annulment of the cusw and gm sedans, the abandonment of india (gm and fiat) and china (stellantis). And chrysler as well as dodge would'v gotten fuller new lineups and...etc.

Btw Marchionne started all the cancelations and launching of giorgio research and doubling down on v8 s and cancelling belvedere, dropping incentives and fleet sales etc AFTER the gm merger or hostile takeover plan A failed, then the all-set merger with VW failed (at the last minute due to dieselgate)....

Since fca was now alone, still sub scale in europe and sub scale in n america midsize fwd sedans and cuv s....but with still large net debt with a recession expected by 2020...

Margins were amped, profitability soared, incentives slashed, higher priced big v8 s etc ...

So that....stellantis etc and guess what? Look who has global scale and reach (not china though), tons of cash accumulated, by far the best margins in n america AND europe+middle east AND latam and the prospective scale economies for electrification via giorgio ev/stla large as THE only usa+canada 'platform'.

Ie who has 'earned' his cost of capital since 2008, now that the cycle is at an end (no more free money for gm ford and say vw etc)?

NOT gm. NOT ford.....but exFCA(even if u don't count ferrari).

 

I mean who didn't see this coming? Sales have softened as quick as they took off. They have no new products to add to the plants to help offset the decline of, IMHO overpriced products. This is setting the stage for upcoming contract talks that are going to be very tough for both sides, and many weeks of "inventory adjustment". GM seems to be way more in tune with the business environment then FCA US does.

 

Cost of capital by delaying inevitable investments is not a sustainable long term strategy. It produced awesome short term financials and long term pain - high warranty cost, fines and penalties for not meeting standards.

 

The longterm inevitable was MERGER for scale economies, including in and of cost of capital.

Ie. ExFca has grown! While gm and ford have shrunk! (Taking 2008 bailouts etc as baseline with today's normalized nonzero cost of money due to large rate hikes by us fed)

 

GM has been investing, though. They just wanted to fix themselves before playing Mergers & Acquisitions. To me that’s smart. They do as well as they probably can in China for now. To play more in the future they need BEVs. Building up vehicle and dealership quality will yield long term dividends. Leaving Europe was, if I recall, pre-Barra even if it finished up under her watch.

Sometimes it helps to NOT buy something else before you've figured out how to deal with what you already have. I'm sure when GM is ready to buy, there will be something to buy. Brightdrop seems to be heading for success, under the radar...

I don't see GM as avoiding capital expenses. I see them as avoiding M&A because organizational development works better.

 

Yes GM invests. And GM is doing fairly well in some quality surveys. FCA didn’t invest and didn’t improve quality. All FCA wanted was to sell excuses and merge.

 

....because money/capital was not free for fca, while it was for gm ford vw et al. GM has indeed made more of that than ford or vw, but is really just still 'killing time and money'....which is why its shares are no higher than they were in 2009/10. The wall street Treadmill, treading water henceforth IF sales and profit squeeze happens aka recession in n america, with money/capital no longer 'free'. Of course ev transition subsidies in usa etc will see them treadmilling along.