Why Fiat S.p.A. Needs the 2015 Jeep Renegade

Jeep is a great American brand, but this Jeep is aimed at markets far from U.S. borders.

Apr 14, 2014 at 8:09PM

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The new 2015 Jeep Renegade will make its U.S. debut in New York this week. Photo credit: Fiat Chrysler

Jeep has never built anything like the new Renegade. 

The brand's first-ever subcompact will be one of the smallest SUVs sold in the U.S. when it debuts later this year. And it's going to be built far from traditional Jeep territory, in Italy.

All that may sound strange to American Jeep fans, but Fiat Chrysler (NASDAQOTH:FIATY) has big plans for the new Renegade -- plans that stretch far beyond America's borders.

As Fool contributor John Rosevear explains in this video, the littlest Jeep will be a real Trail Rated Jeep -- but while it will be sold in the U.S., its real importance will be found overseas.

A transcript of the video is below.

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John Rosevear: Hey Fools, it's John Rosevear, senior auto analyst for Fool.com. The New York International Auto Show starts this week, media days are Wednesday and Thursday, and we're expecting the automakers to unveil several interesting new models.

I'll be there with my Foolish colleague Rex Moore, we'll bring you a video report of the show's highlights at the end of each day, and we'll have a bunch of more in-depth reports for you over the next week or so after that. One of the vehicles we'll be checking out closely is the all-new Jeep Renegade.

The Renegade is something new for Jeep, a subcompact SUV. It was originally unveiled at the Geneva auto show in Switzerland last month, but this will be its North American debut.

It's an interesting product for Jeep, and one of the things that's most interesting about it is that it's not really primarily intended for the U.S. market. It will be sold here, you will be able to buy one, but it's really going to be aimed at younger buyers in Europe and in developing markets, possibly China as well.

And it's not going to be made in the U.S., it's going to be made in Italy. Fiat and Chrysler are now one company, and CEO Sergio Marchionne is running them as one company with a global vision.

One part of that vision involves making Jeep a truly global brand, Jeep has offered a fairly wide range of models for years but most of its sales and profits and really most of its image come from the Wrangler and from the big Grand Cherokees.

Now in order to introduce Jeep to new audiences outside of the U.S., they've come up with this Renegade, which is going to go head to head with vehicles like the Opel Mokka, which is a European cousin of the Buick Encore, and with the Ford (NYSE:F) EcoSport, which is another subcompact SUV, it's based on the Ford Fiesta's platform and it has been a big success for Ford in places like India, where small and rugged and cheap but still nice is a winning combination.

That's really where Jeep is aiming this Renegade, and they have what could turn out to be a trump card if they market it correctly, and that's that this little thing comes in a 4x4 Trail Rated version.

Chrysler says the Renegade Trailhawk, and I quote, "delivers best-in-class 4x4 Trail Rated capability with class-exclusive Jeep Active Drive Low, which includes 20:1 crawl ratio and Jeep Selec-Terrain system."

If they can deliver that for a price that is competitive with a Ford EcoSport, at least a loaded EcoSport, the Renegade could get quite a bit of attention and could do quite well.

But I don't know how it'll do here. Really in the U.S. its competition will be the Nissan (NASDAQOTH:NSANY) Juke and the Kia (NASDAQOTH:KIMTF) Soul, and neither of those are positioned as something with serious off-road capability.

If it's a success, it makes me wonder if Ford will try to bring the EcoSport to the U.S., they certainly could do it without a massive investment, it could be built right on the line in the Mexican factory that builds the U.S. market Fiestas.

But we'll see how it plays out.This new Jeep is an interesting product, and I'm looking forward to getting up close with it in New York later this week, Rex and I will bring you a close look at it with a video report from the show floor. Thanks for watching.

John Rosevear owns shares of Ford. The Motley Fool recommends Ford. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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