Jeep Is Slashing Prices By Up To $4,000 Because It’s Losing The Sales Race

Things haven’t been going so well for Jeep, and the solution for now involves price cuts. The Detroit News reports that Jeep is adding $3,000 worth of stuff to the Wrangler and Gladiator, slashing Gladiator pricing by $1,700, cutting $2,500 off the MSRP of a Compass, and chopping up to $4,000 off the price of a Grand Cherokee. As Jeep boss Antonio Filosa said at a media roundtable: “We need to do something on market penetration and market share, because it’s not where this brand deserves to be.”

So, how did this happen? Well, it all seemingly comes down to one thing — the Jeeps are too damn expensive — but there are facets to this story. This wave of price cuts comes after an upmarket push for the Jeep brand that was supposed to be fueled by a sales tailwind that ended up running out of steam. It’s a cautionary tale, and one that other automakers could stand to learn a lesson from.

Following the bankruptcy of Chrysler, Jeep was primed to be the company’s recovery season meal ticket. The brand had devoted fans, an iconic image, and historical proof of scalability through models like the Grand Cherokee. By the end of 2016, vehicles like the Wrangler, Compass, and Renegade helped Jeep shift 865,028 vehicles off American dealer lots — an all-time high. In 2018, Jeep hit another all-time high of 973,200 SUVs and crossovers sold in America. However, this rise could only last so long. In 2023, Jeep sold 642,294 vehicles in America, six percent fewer vehicles than it sold in 2022. That’s right, fewer vehicles than it sold during a year when the whole car industry was battling shortages, which suggests this sales slump isn’t due to supply issues. So what the hell happened?

Let’s start with the obvious factor of price hikes. Throughout the 2010s, Jeep repositioned itself from plucky maker of utility vehicles to every marketer’s favorite word salad — a premium lifestyle brand. The Patriot was a dirt-cheap box on wheels based on economy car mechanicals. The Jeep Renegade was also a box on wheels based on economy car mechanicals, but it saw some serious price creep over the years.

In 2018, the Fiat-based Renegade carried a base MSRP of $18,750, and you could get the CUV spec’d with the mid-range Latitude 4WD trim for $23,595 plus freight. Just two years later, in 2020, the base Renegade had a starting MSRP of $22,375, and the Latitude 4WD trim carried an MSRP of $25,895. In 2023, a shrinking lineup meant the base-model Renegade started at $29,445 including a $1,595 freight charge, which might help explain why Jeep had a 753-day supply of them back in June. Keep in mind, the Renegade was Jeep’s entry-level product, and general price hikes were happening across the board.

Those price hikes were often a combination of product-repositioning and inflating biting back. In 2018, the then-new JL Wrangler started at $28,190 including freight, or $3,100 more than a base 2017 JK Wrangler. By 2023, that figure was up to $33,090. That last figure is cheaper than adjusting the 2018 model’s pricing for inflation, but inflation doesn’t explain the $3,100 price hike that accompanied the 2018 redesign. Of course, when Jeep launched the 2018 Wrangler, it didn’t have high interest rates or considerable competition to contend with, and not all models got that lucky.

Oh, Wagoneer. What ever will we do with you? Look, hindsight may be 20:20, but 2021 was not the most ideal time to release 6,000 pounds of luxury SUV beef. Gas prices were on their way up, inflation fears ran high, and if you wanted a massive luxury SUV that could be spec’d into six-figures, the freshly redesigned Cadillac Escalade was an established name that could be had with an economical diesel engine. In 2022, its first full year on the market, 47,955 Wagoneers and Grand Wagoneers found homes in America; for 2023, that number dropped to 39,767.

That brings us nicely to the second factor: competition. For years, Jeep didn’t really have any direct competition for its halo product in America. That all changed when the reborn Ford Bronco started proudly touting the on-road benefits of independent front suspension. At the same time, the Grand Cherokee is going up against a number of extremely competent luxury SUVs like the Genesis GV80, the Grand Wagoneer is trying to fight the Escalade, the Gladiator can only claw so much ground from the Toyota Tacoma, and the Compass is flat-out uncompetitive.

Finally, there’s the simple fact that cheap credit has simply dried up. The average new car interest rate for prime borrowers in December, as reported by CNN, was 6.88 percent. Financing’s expensive, and leasing is no longer financially attractive in most cases, so it’s reasonable to expect customers to shy away from models on which options pile up quickly. What’s more, people are being squeezed on all fronts with more expensive housing, more expensive groceries, and generally more expensive lives, and cars are a place in which spending can be cut. Going off of census and inflation data, there was a $4,065 gap between inflation-adjusted 2019 median household income and actual 2022 median household income, and nothing suggests that gap is narrowing, or even holding.

The decline of Jeep sales suggests that not every brand can sustain a premium push. As vehicles grow more expensive, some customers will just say no. They’ll take their business elsewhere, because elsewhere offers something they can afford. Judging by the Chevrolet Trax quickly becoming Chevrolet’s third-best-selling vehicle, and compact cars like the Honda Civic still holding their own, affordability is hugely desirable in today’s new car landscape. Don’t lose sight of the masses while chasing the few.

(Photo credits: Jeep)

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• Jeep Is In Trouble And Hopes Nostalgia Can Save It

• Jeep Is Getting Kneecapped By High Prices, Supply Chain Issues, Ford Bronco

• There’s A 753-Day Supply Of Jeep Renegades (And Other Cars) That Are Slow To Sell

• America’s Supply Of Jeep Renegades Down To Just 542 Days

• Jeep Is Getting Kneecapped By High Prices, Supply Chain Issues, Ford Bronco

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