Jeep CEO Expects Sales Momentum to Continue After Record 2014

DETROIT – Jeep in 2014 surpassed its global sales goal of 1 million units, delivering 1,017,019 vehicles around the world and besting the brand’s 2013 record of 731,565 by 39%.

Jeep CEO Mike Manley expects the momentum to continue in 2015 as the brand strives to reach its next goal of 1.9 million units by 2018.

“We built up to that number over a 3-year period through various actions, be it market or product actions,” Manley tells WardsAuto at the 2015 North American International Auto Show here. “I don’t see it as an anomaly. I view it as halfway (to the 2018 goal) with a lot of actions left to go to complete the journey.”

One of those actions is to build on growth outside the brand’s North American home market. Jeep is building new plants in Guangzhou, China, and Pernambuco, Brazil, two large growth markets.

Plans call for the Brazil plant to begin Renegade production at the end of the first quarter. The China plant will be online by the second quarter, but a product has yet to be announced for the facility.

Manley doesn’t reveal volume expectations for China or Brazil, but says Jeep enjoys a strong reputation among Chinese consumers.

“We have very high awareness in China, even though volumes are small,” he says. “That’s because we were the first manufacturer to localize there in 1983 and built there through 2004. Today we have good growth; we grew 40% year-over-year last year from a small base.”

The Renegade is a product Jeep is counting on to boost volumes in most regions, including the U.S., where the small utility vehicle segment has been hot.

If Europe is any indication, the Renegade should perform well in other major markets, including the U.S. and China.

Manley says Europe sales have been strong, although the Renegade has been on sale only a short time there.

“We’re pleased with the initial reaction to Renegade in Europe,” he says. “The volumes are small because it’s only been in market one month, but inquiries seemed to build rapidly and (Jeep’s) profile as a result is improving. Hopefully that continues to grow as we get through this year.”

There has been some speculation that low gasoline prices may hamper sales of small vehicles such as the Renegade, but Manley does not believe they will have an impact.

“You may see some people trading up into bigger vehicles, but you may see some people trading from used vehicles to new vehicles in lower segments,” he says. “It’s hard to say they’re going to move out of the segment.”

Manley also doesn’t predict a decline in diesel vehicles, although diesel fuel cost has remained high while gasoline prices plummeted.

Fuel economy is one reason consumers purchase diesels, but not the only reason, Manley says.

“We haven’t see diesels fall off,” he says. “A lot of people buy our diesels because they enjoy the torque characteristics of the car, particularly if they use it to tow. They also like the durability and high resale value.”

Manley sees low fuel prices as a boost to the industry due to their positive effect on consumer sentiment, adding at some point gasoline prices once again are likely to rise.

“Everyone has been in a cycle like this before,” he says. “People recognize at some stage it’s going to (change).”

[email protected]