Jeep Played to New York Audience During Grand Cherokee Development

HALF MOON BAY, CA – It took Chrysler Group LLC product planners a New York minute to set priorities for the all-new ’11 Jeep Grand Cherokee.

The auto maker polled dealers from three regions – New York, the Southeast and the Great Lakes states – about their aspirations for Jeep’s flagship. And while the answers from each were the same, they came louder from the Empire State, which accounts for about 35% of the brand’s volume, says Bob Hegbloom, head of truck and SUV product planning.

“The New York guys just tell you their ‘feelings,’” he says, with a note of sarcasm.

What did they want from a redesigned Grand Cherokee?

“They’re looking at the value story,” Hegbloom says here during a media preview of the SUV.

So Chrysler responded with an aggressive price-reduction strategy that lowers the base sticker by up to $765, depending on trim level, when compared with the ’10 Grand Cherokee. And factoring in additional content delivers net gains valued at $2,000 on the volume Laredo line.

Savings on big-ticket items such as a new chassis and engine allow Chrysler to add content without any cost penalty, says Jeep-brand marketing chief Jim Morrison, who lists active head restraints, keyless entry and push-button start among features that are new to the ’11 model.

Had Chrysler not shared engineering resources with former DaimlerChrysler AG partner Mercedes-Benz, the cost of developing the Grand Cherokee’s chassis “should have been over the moon,” Morrison told Ward’s last month during a Job One ceremony at the auto maker’s Jefferson Avenue North assembly plant in Detroit.

The Grand Cherokee’s new bones are expected to shoulder the next-generation Mercedes M-Class cross/utility vehicle, set to debut in the ’12 model-year.

New Pentastar V-6 affords economies of scale; EU market gets diesel next year.

Morrison then cited to the all-new 290-hp 3.6L Pentastar engine. “We get efficiencies because this will be our only V-6,” he said.

The Pentastar, which makes its debut in the ’11 Grand Cherokee, eventually will replace seven 6-cyl. engines currently in Chrysler’s powertrain portfolio.

Value is critical to the new SUV’s competitiveness because “the segment has changed,” Hegbloom says.

Since the Grand Cherokee’s last overhaul in ’05, Middle SUVs have shrunk to eight nameplates from 13, when contrasted with Ward’s segmentation for the ’10 model year.

Meanwhile, Middle Cross/Utility Vehicles for ’10 feature 24 nameplates, compared with 17 in ’05.

Underscoring this trend is a greater demand for on-road refinement, which Jeep has addressed not only with the Grand Cherokee’s new engine and chassis, but its Quadra-Lift air suspension supplied by Continental AG.

But Chrysler could not walk away from the off-road capability consumers expect from the brand.

“It is inherent in who we are,” Hegbloom adds, noting the Grand Cherokee’s all-new Selec-Terrain traction-control system that affords greater performance in demanding conditions.

Similar to Land Rover’s Terrain Response system, Selec-Terrain adapts the Grand Cherokee’s wheel-slip for surfaces such as snow, rocks, sand and mud.

The upshot is the new Jeep competes with a wide range of vehicles. Toyota Motor Corp. accounts for three separate challengers, Hegbloom says.

Chrysler matches the entry-level Laredo, which starts at $31,490, with the 5-passenger Toyota Highlander, while the off-road Laredo X is aimed at the Toyota 4Runner. At the top end, the Overland and Limited trims target the Lexus RX 350.

For North America, the Grand Cherokee’s full competitive set takes in the Honda Pilot, Chevrolet Equinox and GMC Acadia.

According to Ward’s data, Grand Cherokee sales outdistanced only the 4Runner through May, compared with like-2009. And looming in the not-too-distant future is a redesigned-for’11 Ford Explorer.

Historically, the Jeep has never recorded an annual sales total that exceeded the Ford, though it came within 2,000 units in 2009. The Explorer’s best year was 2000, when it notched 445,157 deliveries.

The Grand Cherokee’s best performance came in 1999, when its sales tallied 300,031.

Meanwhile, in Europe, the new Jeep butts heads with the M-Class, Audi Q5, BMW X5 and Land Rover Discovery 4. The Grand Cherokee leverages its iconic heritage to achieve “premium” status, says Mike Manley, Jeep-brand president and CEO and lead executive for Chrysler’s international organization.

But for off-road prowess, the Grand Cherokee faces just one competitor. “Capability-wise, it’s only Land Rover,” Manley says, adding European dealers are “very excited” about the new SUV, which arrives there later this year and adds a diesel engine from VM Motori in 2011.

Says Hegbloom, again with a hint of sarcasm: “To try to align a product plan that can compete against multiple products is a fun task.”

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