Off-the-scale prices for iconic off-roader Jeep brand

After more than two decades, Jeep’s return to India was celebrated in grand style. The launch of the iconic American brand was marked by a two-day extravaganza in Jodhpur where invitees were treated like royalty. Unfortunately, the prices of the three Jeep models launched were no less extravagant and way higher than market expectations. Has Fiat Chrysler Automotive (FCA) shot itself in the foot?

Of the three models, the Grand Cherokee is the most overpriced. At Rs 93 lakh for the base Limited and Rs 1.03 crore for the Summit, the Cherokee is more expensive than the massive seven-seat Mercedes GLS. To get some perspective on the Jeep’s India pricing, we need to look at the US, Jeep’s home market where the Grand Cherokee slots in between the Mercedes GLC and GLE in terms of price. Jeep holds responsible the exorbitant imports duties for this price. However, other luxury brands like Volvo and Jaguar Land Rover to some extent, have either absorbed a part of the higher customs on their imports or are at a benefit by bringing in cars with engine capacities below 2.0 litres, which enjoy a lower import duty against imported cars with engines above 2.0 litres. The other challenge for FCA is that the Grand Cherokee is due for a facelift next year and it will be under pressure to clear existing stock of the current car. This in turn could lead to early discounting which might be the only way for dealers to shift the product, perceived to be exorbitantly priced, out of the showrooms.

Sources tell us that the Grand Cherokee has received few bookings with only about 20 percent of Jeep buyers opting for it. The Wrangler on the other hand, priced at Rs 71 lakh, has received 80 percent of the total bookings. Unlike the Grand Cherokee, which is more of a mainstream luxury SUV that is pitted against formidable German brands, the Wrangler is a unique proposition that has no direct competition. It’s possibly the most hardcore off-roader available in the country today and according to sources, nearly all Wrangler customers are looking to further accessorise it. However, it is still expensive by any standard and after the first lot of enthusiasts who have queued up to buy it, there may not be too many takers.

Oddly enough, at Rs 1.12 crore, the priciest Jeep, the SRT version seems well priced, as pound for pound it offers better performance value against other sporty SUVs like the Porsche Cayenne Turbo (1.9 crore) and the BMW X5 M (1.6 crore). It is also has the largest engine at 6.4 litres. However, the trouble is the brand and luxury value that Jeep lacks when compared to the others. The brand has always been seen closer in stature to a Land Rover rather than a luxurious Range Rover.

With this kind of pricing, it seems Jeep isn't too keen on numbers but is rather hoping to establish the brand for the locally built models. This was also evident by the fact that there were multiple references to local assembly plans at the launch. However, with the premium prices and limited dealer spread (only two currently), these high-end Jeeps may not be able to make much of a market splash to establish the brand for the India-built products set to arrive sometime next year. It may not be a great start for Jeep in India, but this is only the beginning of a long haul in the Indian market.