Wrangler, Grand Cherokee Leading the Surge in Jeep Sales

What's pushing sales of Jeep higher by almost 50% in 2014?

Jul 26, 2014 at 1:00PM

Jeep Grand Cherokee

2014 Jeep Grand Cherokee. Source: Fiat Chrysler

Crossovers and SUVs continue to be the must-have rides for many U.S. consumers. Overall, sales for the segment are up 11.5% in the first six months of 2014, outpacing the broader auto market's gain of just 4.3%. And quite frankly, Fiat Chrysler's (NASDAQOTH:FIATY) Jeep division may be set up the best to benefit from it. 

In 2013, Jeep inched out a sales gain of 3.4%. So far, 2014 has been a different story. The automaker has cranked out a whopping 45.1% increase in sales for the first half of 2014, compared to year-ago results.

Okay, so what's the deal here?
Jeep has posted solid double-digit sales gains for its top two sellers, the Jeep Grand Cherokee and the Jeep Wrangler. But the lower priced, compact Jeeps are also selling nicely. 

Below is a look at the first six months of sales in 2014 and 2013 for each Jeep model, as well as the year-over-year increase or decrease:

Model

2014

2013

Change

Grand Cherokee

89,613

80,796

10.9%

Wrangler

85,737

77,728

10.3%

Cherokee

80,432

N/A

N/A

Patriot

43,928

38,115

15.3%

Compass

33,092

26,778

23.6%

       

Total

332,802

229,405

45.1%

Source: GoodCarBadCar; table made by author. 

Coming into 2013, Jeep dropped the Liberty from its lineup; it had sold approximately 75,000 units the year before. In late 2013, the company brought in the Jeep Cherokee -- not the Jeep Grand Cherokee -- to fill the empty void left by the removal of the Liberty. 

In the first six months of 2014, the Jeep Cherokee has sold almost 80,000 units -- 5,000 more than the Jeep Liberty did in all of 2012. The Cherokee also has much better fuel efficiency, (26 mpg combined between city and highway, versus 19 mpg combined for the Liberty), which could be helping sales.

The removal of the Liberty weighed on overall sales in 2013. The Cherokee's impressive start in 2014 only highlights the notion that Jeep needed another vehicle in the lineup to take over where the Liberty left off.  

Jeep Cherokee

2014 Jeep Cherokee. Source: Fiat Chrysler

Jeep, Jeep, Jeep!
Aside from the Liberty/Cherokee swap, I've tried examining many different facets of the new Jeep lineup. The fuel economy is unchanged for each model from 2012 through 2014. The exception is the Jeep Grand Cherokee, which slightly boosted its combined miles per gallon from 20 mpg to 21 mpg.

It's not as if Jeep resorted to slashing prices to drive sales either. The Grand Cherokee had the largest increase, with the starting price rising 6.5% in 2014, to $29,495.

The starting price for the Patriot and Wrangler Unlimited increased just 2.5% and 0.7%, while the starting price for the Wrangler remained unchanged.

The Compass is the only model to see a price drop from 2013. It's starting price of $18,795 is about 3.5% lower than last year. 

Shaking things up
The Grand Cherokee, Wrangler, and Cherokee respectively hold the seventh, eighth, and ninth spots in the top 10 so far this year for unit sales in the SUV/crossover segment. In the top 10, there are only three models with faster growth rates, that being the Toyota Motor's RAV4, the Nissan Rogue, and the Subaru Forester. 

It appears likely that between Jeep's lineup and the three competitors listed above, the popular names from 2013's list of top-selling SUVs are taking a hit. Namely, the Ford Edge and Escape, and General Motors' Chevrolet Equinox, which have experienced sales drops of 11.5%, 2.4%, and 4.4%, respectively. 

Jeep Wrangler

2014 Jeep Wrangler. Source: Fiat Chrysler

It's a Jeep thing
The company's slogan, "It's a Jeep thing", appears to be ringing true in 2014. Sales continue to climb higher, and there's not really a definitive explanation for it. The pricing is right, there's a solid mix of large and compact models, and the lineup seems to resonate with both longtime Jeep owners and new customers. 

The SUV and crossover market continues to outpace the broader U.S. auto market, and no other brand stands to benefit more than Jeep, which devotes its entire lineup to the category. 

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Bret Kenwell owns shares of Ford. The Motley Fool recommends Ford and General Motors. 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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