DETROIT – Jeep aims to punch above its weight with the arrival next year of the Grand Wagoneer, a vehicle will top $100,000 fully loaded and bring the brand into the highly profitable large SUV segment.
But defying skeptics as an underdog is something its parent company, Fiat Chrysler, has taken pride in doing as the smallest of the Detroit automakers. It’s something it plans to do again with the Grand Wagoneer luxury SUV and its less expensive sibling the Wagoneer, which is also an SUV.
“People laughed at us 10 years ago when we said that we would take on the very best,” Ralph Gilles, global head of design for Fiat Chrysler, told CNBC referring to the success of its most recent Ram 1500 pickup. “We have poured our hearts and souls into this product.”
Jeep Grand Wagoneer ConceptFiat Chrysler
The Ram 1500 outsold the Chevrolet Silverado to become the second best-selling pickup in America for the first time ever last year and earned Cars.com’s title of 2020 Luxury Car of the Year, a first for a truck.
But that was a segment the company was already competing in with the vehicle. For the Wagoneer SUVs, Fiat Chrysler will have to re-establish itself in the large SUV segment and compete against well-known nameplates.
The Wagoneer and Grand Wagoneer names were previously used by Jeep for large SUVs from 1963 until 1991. The company had promised to resurrect the Wagoneer name for nearly a decade as a way to better compete in the highly profitable large SUV segment.
‘On the podium’
Christian Meunier, global president of Jeep, declined to discuss expected sales of the SUVs but said they will be “on the podium for sure” with the top sellers.
“We’re going to be a key player in the segment,” he told CNBC after the company unveiled a concept version of the resurrected SUVs Thursday as a preview of what’s to come for the vehicles.
Jeep Grand Wagoneer ConceptFiat Chrysler
To be “on the podium,” Jeep will have to outsell a handful of foreign competitors and one of its crosstown rivals, which lead the large SUV segment.
General Motors has dominated the large SUV segment for decades with its six offerings under the Cadillac, Chevrolet and GMC brands. Each business unit has short and long versions, also known as wheelbases, of the SUVs.
Jeep, according to Meunier, plans to do the same with the Wagoneer and Grand Wagoneer, including different sizes for both vehicles and the potential for additional models.
GM’s mainstream Chevrolet Tahoe and Chevrolet Suburban as well as their sibling GMC Yukon and GMC Yukon XL SUVs typically account for more than 70% of mainstream full-size SUVs in the U.S., according to Edmunds.com.
2021 Cadillac Escalade interiorGM
Meunier said GMC and Cadillac “are the benchmark in business opportunities” for the Wagoneer models. “That’s what we’re going to go after,” he said.
While large mainstream and luxury SUV segments are highly profitable for automakers, they’re smaller markets than many of Jeep’s other segments, making them more competitive. GM also redesigned its entire lineup of large SUVS this year.
North America is expected to account for the majority of sales for the Wagoneer models, followed by the Middle East and much smaller sales in countries such as China, according to Meunier.
Natural extension
The large SUV segment is arguably the last segment Jeep could enter after an expansion into smaller vehicles and the pickup segment in recent years.
“I think brands like Jeep and Ford and pretty much everyone else is trying to explore different niches they can get into,” said Jessica Caldwell, executive director of insights at Edmunds.com. “Clearly, Jeep has had a hold on the off-rod SUV consumer, and then you have vehicles like the Ford Bronco come along and threaten their livelihood.
“I think it makes sense for them as well to expand into other niches as well.”