Marketing Missteps Make Jeep Underachiever in Russia

ST. PETERSBURG – Industry-watchers say poor marketing and a relatively small model lineup are hurting Jeep sales in Russia.

Autocenter Aurora, one of Russia’s largest auto dealers, says it has terminated an agreement with Jeep maker Fiat Chrysler Automobiles’ Russian subsidiary over “issues of business.”

Mikhail Gevorkov, a co-owner of St. Petersburg-based Autocenter Aurora, says FCA has not been importing updated versions of vehicles for which demand in Russia is the greatest.

A similar parting of the ways between FCA and another Russian dealer, Elva Motors, took a similar action in the fall of 2016.

Jeep sales in Russia peaked in 2014 with 8,221 units, but plunged 75% to 2,057 in 2015 and fell 38.3% to only 1,269 last year, according to WardsAuto data. These are unexpectedly low figures, given the popularity of SUVs and CUVs among Russian consumers.

According to Sergey Stepanichev, deputy editor of the trade publication Auto Analyst, further delays in revisions to Jeep’s development strategy in Russia may result in further problems for the brand.

FCA sells five Jeep models in Russia, including a Wrangler Unlimited version of the Wrangler. The Renegade is the least expensive with a base price of RR1.46 million ($25,600). The Grand Cherokee accounts for 46% of all sales, but at RR2.8 million ($52,000) it is expensive by local standards.

Stepanichev says a narrow selection of engines goes hand-in-hand with the brand’s narrow model range.

Two years ago FCA planned to build a $1 billion Jeep assembly plant in St. Petersburg with capacity for 120,000 units annually. But the automaker abandoned those plans when Russia entered a severe economic downturn resulting in a cutback in the number of dealers in the country.