Some interesting news from the local Jeep dealer

[Oncorhynchus]

The couple times I’ve taken my 2004 BMW to the dealer I’ve had no problem getting a rental even though the car is originally from out of state and i am the 3rd or 4th owner.

Whenever i have gone to the jeep dealer where we bought my wife’s wk2, we have never been given or offered a rental. Best we can get is a minivan ride to the house, which they may not even offer anymore in the covid world.

And who ultimately pays the bill for that white glove experience? The customer. I am personally not interested in paying for the frills. Minivan ride home is fine with me as long as the human to human interaction is professional and considerate.

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[rickinAZ]

BH has a very hands off approach to the businesses they run.

Agreed. I was hoping that they'd make an exception for this industry. Or...at least set the tone for how they wanted their dealerships run. BH has a strong brand/reputation and I'm surprised that they are willing to absorb the image damage without implementing some change. I've been a shareholder for over 30 years and this seems to be their least "wholesome" acquisition yet.

Oh, well...

 

[Oncorhynchus]

This is all window dressing.

The sucky dealers and customer service that right now spoil the ownership experience will spread over to the flashy new buildings, like the COVID virus...

I’m not as pessimistic as you. “Wait and see” is the tack I am taking. Carlos Tavares clearly stated that he believes there are too many brands in the portfolio and has given the chief executives of each brand a commitment of a certain number of years of strategic financial support before they will be judged by the cold calculus of the market and not protected by any
safety blankets of grand strategy or synergies.

If I was given the helm of the Jeep brand I would very much want to disentangle my fate from the customer experience of today’s CJDR dealerships and have a chance to reshape the reputation of my dealer network.

When I drove out of my way to have my warranty service performed at the highest rated CJDR dealer within 50 miles of me they said they couldn’t do a front end alignment for me because they don’t have the equipment to handle 35” tires. I was left wondering to myself … am I dreaming right now? This is really a Jeep service department? …

 

[The Last Cowboy]

And who ultimately pays the bill for that white glove experience? The customer. I am personally not interested in paying for the frills. Minivan ride home is fine with me as long as the human to human interaction is professional and considerate.

And that is why most don't want to buy a luxury car. The cost isn't worth the experience. But for those who do buy them, they want the total experience.

Wrangler, and to a lesser extent, Cherokee are the only models driving profit now. So, as the saying goes, Don't worry about the mule, load the wagon. The will just keep making us pay until we can't take it anymore. Only when sales slow to an unacceptable level will price increases stop.

 

[Oncorhynchus]

Agreed. I was hoping that they'd make an exception for this industry. Or...at least set the tone for how they wanted their dealerships run. BH has a strong brand/reputation and I'm surprised that they are willing to absorb the image damage without implementing some change. I've been a shareholder for over 30 years and this seems to be their least "wholesome" acquisition yet.

Oh, well...

+1 on being a BH investor. When the tide goes out this year and all the high-flying profit-non-generating companies’ stock come crashing, time to allocate some of my dry powder onto some more BRKB.B shares.

 

[aldo98229]

For decades Jeep was a blue-collar, DIY brand. Now the Italian and French bosses want Jeep to be a blue-blood brand that competes with Land Rover, with service and price to match.

The problem is that half of us on here grew up with, and owned Jeeps, because they were simple, rugged, DIY kind of vehicles. The other half came to Jeep lured by the brand image, the snob appeal, the social media images of exotic adventures, and all the comfort features; so, now —rightfully— expect a level of service that matches the prices we pay.

Raising prices seems to be working for Jeep; sales keep humming along. But part of Jeep’s growth has come from a market-wide shift towards off-roading and overlanding.

For instance, after 13 years of non-stop growth, Subaru, the “anti-SUV brand”, just closed one of its worst years. Granted, despite its quirky products in the past, Subaru has grown into a bland and mundane brand. Subaru is now trying to add pizzazz to its lineup by adding more “off-road” versions and slapping orange accents to its vehicles.

Will Jeep sales start to slacken once this off-road fad dies off?

I don’t know what the answer is.

Personally, I think Jeep has reached, or is close to reaching, the limit of how much it can charge, especially given the terrible customer service it provides. But Jeep has surprised us many times before...

 

[CT_LFC]

And who ultimately pays the bill for that white glove experience? The customer. I am personally not interested in paying for the frills. Minivan ride home is fine with me as long as the human to human interaction is professional and considerate.

But as Jeep goes deeper and deeper into the luxury price territory, these things will be expected by customers.

Per Jeep's website a '22 Grand Wagoneer starts at $88K, that is almost $15K more than the X7 starts at and the dealer experiences are not even comparable.

 

[aldo98229]

I’m not as pessimistic as you. “Wait and see” is the tack I am taking. Carlos Tavares clearly stated that he believes there are too many brands in the portfolio and has given the chief executives of each brand a commitment of a certain number of years of strategic financial support before they will be judged by the cold calculus of the market and not protected by any
safety blankets of grand strategy or synergies.

If I was given the helm of the Jeep brand I would very much want to disentangle my fate from the customer experience of today’s CJDR dealerships and have a chance to reshape the reputation of my dealer network.

When I drove out of my way to have my warranty service performed at the highest rated CJDR dealer within 50 miles of me they said they couldn’t do a front end alignment for me because they don’t have the equipment to handle 35” tires. I was left wondering to myself … am I dreaming right now? This is really a Jeep service department? …

It is not about pessimism; it is simple math: the more stores you have, the more units you need to sell to sustain each of them.

Domestic automakers have an excess of dealers. By all indications, Jeep sales are plateauing; adding stand-alone stores is only going to increase the breakeven point of dealers.

Like you, I believe that Tavares has what it takes. But, unfortunately, history shows that without a well-planned, comprehensive program designed to instill the changes needed in the culture and the attitude of dealers —and of the automaker, these initiatives fall flat on their face.

Every auto executive wants to disentangle his brand from its sister’s brands. In their minds, they do everything right and the only reason things don’t get better is because those other pesky brands hold his down. But the reality is that CDJR dealers provide a level of foot traffic that will be hard for stand-alone stores to match. Worse, Jeep itself brings its own share of bad practices into the CDJR dealer experience. Jeep is not blame-free.

 

[Oncorhynchus]

But as Jeep goes deeper and deeper into the luxury price territory, these things will be expected by customers.

Per Jeep's website a '22 Grand Wagoneer starts at $88K, that is almost $15K more than the X7 starts at and the dealer experiences are not even comparable.

Which begs the question: is the GW really a Jeep?

 

[aldo98229]

Which begs the question: is the GW really a Jeep?

Yes. Grand Wagoneer is the Chrysler Imperial of the 21st century.

A little history: Imperial started in the 1920s as the top Chrysler model; in the 1950s Chrysler spun-off Imperial into its own separate brand. It didn’t matter, to everyone it continued being the “Chrysler Imperial” until its demise in 1975.

Mercedes tried the same trick with Maybach; it gave it separate stores, models, etc. It is now the top trim in the Mercedes lineup.

Similar thing with Ram: after 13 years, half of the shoppers out there continue calling it the Dodge Ram or the Dodge truck. Old habits die hard.

Wagoneer will always be a Jeep, no matter how hard Stellantis pretends that not to be the case.

 

[Oncorhynchus]

It is not about pessimism; it is simple math: the more stores you have, the more units you need to sell to sustain each of them.

Domestic automakers have an excess of dealers. By all indications, Jeep sales are plateauing; adding stand-alone stores is only going to increase the breakeven point of dealers.

Like you, I believe that Tavares has what it takes. But, unfortunately, history shows that without a well-planned, comprehensive program designed to instill the changes needed in the culture and the attitude of dealers —and of the automaker, these initiatives fall flat on their face.

Every auto executive wants to disentangle his brand from its sister’s brands. In their minds, they do everything right and the only reason things don’t get better is because those other pesky brands hold his down. But the reality is that CDJR dealers provide a level of foot traffic that will be hard for stand-alone stores to match. Worse, Jeep itself brings its own share of bad practices into the CDJR dealer experience. Jeep is not blame-free.

The numbers would indicate that Jeep does stand a chance. BMW sold about 338k cars in the US in 2019 and 279k in 2020. For Jeep it was 923k and 795k respectively.

But I do agree that the legacy of bad Jeep dealer culture will not be wiped away simply by separation from Chrysler, Doge and Ram.

 

[CT_LFC]

Which begs the question: is the GW really a Jeep?

If it's going to be sold in Jeep dealerships under the brand name, then it's really a Jeep.

A 392 XR can touch $80K, and while BMW does not have a Wrangler competitor, you could get a sweet M3 for that money.

Jeep is playing with the big boys in price, so they need to offer the perks like the big boys do.

It's not like we have a chance to take a discount in exchange for giving up the frills.

 

[aldo98229]

The numbers would indicate that Jeep does stand a chance. BMW sold about 338k cars in the US in 2019 and 279k in 2020. For Jeep it was 923k and 795k respectively.

But I do agree that the legacy of bad Jeep dealer culture will not be wiped away simply by separation from Chrysler, Doge and Ram.

Don’t forget BMW has about 250 dealers; Jeep has close to 4,000!

That’s an average of 200 Jeeps sold per dealer (excluding Dodge, Ram, Chrysler and Fiat), vs 1,200 BMWs sold per dealer.

That’s the most important number.

 

[aldo98229]

It's not like we have a chance to take a discount in exchange for giving up the frills.

True. But at some point the price is simply not worth what we get in return, be from the product, the service, or the overall experience. And I’d argue that Jeep is getting close to that point.

I love Wranglers, but if Jeep keeps jacking prices and dealers continue to suck, next time I come to market I will owe it myself to check out the new 4Runner, the upcoming FJ Cruiser, or (gulp) a freaking Ford Bronco!

 

[Uncommon Sense]

If it's going to be sold in Jeep dealerships under the brand name, then it's really a Jeep.

A 392 XR can touch $80K, and while BMW does not have a Wrangler competitor, you could get a sweet M3 for that money.

Jeep is playing with the big boys in price, so they need to offer the perks like the big boys do.

It's not like we have a chance to take a discount in exchange for giving up the frills.

Exactly. People who can pay $80k for a car have expectations when it comes to customer service and experience. As Jeep prices increase, they start attracting buyers who are in fact cross shopping other luxury brands in that price point.

Jeep is a perfect alternative for Land Rover. It doesn't have to be as snooty, but you certainly can expect a better dealer experience. Nice facilities, services, etc.

There is an entire lifestyle around Jeep life that the brand is not capitalizing on imho. The dealerships don't reflect what the brand stands for imho.

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