What happened to Jeep? Sales fall and cars pile up on dealer lots

From its historical role as a war-winning vehicle to the flagship Wrangler to the impressive Grand Cherokee, the Jeep brand is well-known and has its own cult following, complete with its signature owner wave. 

Jeep sold more than 973,200 vehicles in 2018, the brand's best year on record. Since then, its luck has faltered; selling just 684,600 vehicles in 2022, a nearly 30% decrease.

Sales have continued to decline for the past several quarters. As the company goes electric, it may be banking on tapping into an all-new customer base, but the interim has been painful.

For one example, a supplier just tapped out of a contract with Jeep due to losses from the brand, Crain's Detroit Business reported. 

In 2019, 47% of Jeep owners traded their former vehicles in for Jeeps. But by the first half of this year, that fell to 43%, according to Edmunds.

Though a sizable chunk of Jeep owners still trade in for another one of Stellantis' vehicles, that number is slowly declining; 37% in 2019 to 36% today.

While competing automakers are operating rather lean and intentionally keeping lighter levels of supply at dealerships, the number of cars Jeep has on lots is considerably higher. (This number isn't always a red flag, depending on how popular a car is or how an automaker handled supply shortages in recent years.) 

Jeep had 77 days' supply at the end of June, according to Cox Automotive — higher than the national average of 53 days. Ford isn't far off, at nearly 76 days, but GM's GMC and Chevrolet sat at 63 and 50 days' supply, respectively, in the same period.

Meanwhile, Toyota, at 27 days; Hyundai, at 49 days; and Honda, at 28 days, were substantially lower. Jeep was also offering some of the highest incentives of its peers, around $3,294 per vehicle by Q2, per Cox.  

In addition to industry-wide supply and logistics constraints, Jeep discontinued the Cherokee earlier this year (at least for now). Production of the Grand Wagoneer and Wagoneer fell short in the first half of 2022, and its plants are now in critical status, running 7 days a week. And Wrangler production saw hiccups in preparing for its upcoming refresh. 

"I can tell you from inside that many things went wrong," CEO Carlos Tavares said on an earnings call in July. "We want to be better. We want to fix our operational issues in a more efficient way."

Stellantis has also stopped allocating gas-powered versions of some of the popular Jeeps in 14 states due to increasingly-stringent emissions regulations. Customers in those states can only buy plug-in hybrid versions of those vehicles at dealerships. That could lead customers to look elsewhere.

"What happens if you're a Jeep customer and you don't want a plug-in hybrid, but you do want a Wrangler and they don't have that on the lot?" Robby DeGraff, AutoPacific analyst, told Insider. "Are you going to go to Ford and just go ahead and get a Bronco right then and there because it's readily available and you won't have to wait for it?"

Of Wrangler owners who traded in their vehicle in the first half of this year, increasingly more are looking elsewhere, with 2.6% opting for a Bronco, and another 0.8% going for a Bronco Sport (if they didn't go for other Stellantis vehicles), according to Edmunds data sent to Insider.

"Even though it's been on sale for two model years now, the Bronco is still getting a lot more attention," DeGraff added. "There's just this cool factor about it that has not gone away."

Ram's 703,000 sales record in 2019 fell 22% to 545,100 in 2023. Dodge hit 422,800 sales in 2019, dropping 55% to 190,800 in 2022, while Chrysler saw an 11% drop from 126,900 sales in 2019 to 112,700 sales three years later.  

Dodge, Ram, and Chrysler have experienced similar loyalty declines. While 43% of Dodge drivers would trade their vehicles in for another Dodge in 2019, that rate is 38% now. Though 64% of Ram drivers would trade in their cars for another Ram in 2019, only 53% are doing so this year. One-third of Chrysler drivers traded in and bought a new Chrysler in 2019, only 30% do that today. 

Dodge, Ram, and Chrysler saw nearly 96, 99, and 97 days, respectively, of inventory on lots at the end of June, per Cox estimates. They're also boosting incentive spending; at the end of Q2, Dodge was averaging $2,133 per vehicle, while Ram was at $3,842, and Chrysler hit $1,668.

"Constantly, we are managing through our product strategy, the rebound of our business with fresh product, which, by the way, is a fantastic tool to support pricing power, which is part of our profitability," Tavares said during Stellantis' earnings call.

"If we already have a very sound 4-month order book, we think that in terms of demand, [the second half of the year] will be fine."

Buyers can expect all sorts of electric offerings out of Jeep and the other Stellantis brands as the company spends more than $35 billion to electrify in the coming years.

From the Recon to the Wagoneer "S" and more, the automaker's minimally looking to tap into that iconic Jeep story it has while gearing up for the future.

"That's historically been the stronghold of their vehicles: they are emotionally charged. But people right now are financially charged and challenged, so it doesn't work nearly as well, especially with an aging product lineup," Ivan Drury, director of insights at Edmunds, said. 

"They've got some challenges ahead, but I definitely wouldn't count them out," he added, "because I think when times start getting good again, people keep their eyeballs on them."