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Published: 7/13/2006

Jeep Liberty falls to 4th place in vehicle segment

BY JULIE M. McKINNON
BLADE BUSINESS WRITER

Not only is the Jeep Liberty again losing its compact sport-utility vehicle crown to the Ford Escape, two Japanese competitors are outselling the Toledo-built SUV.

Liberty's U.S. sales are down 16 percent from last year, to 70,106 models through June, and a range of factors have contributed to its fall from first place among compact SUVs last year to fourth so far this year.

One expert noted that Ford Motor Co. has had better incentives than DaimlerChrysler AG, Jeep's parent company, and Escape's 3 percent sales increase can be attributed to a spike in sales for its gas-saving hybrid version, one expert said.

Toyota RAV4 holds the No. 2 spot among compact SUVs so far this year with a 109 percent U.S. sales surge. It was redesigned with more space than the model it replaced and has better fuel economy than the Liberty, said Paul Taylor, chief economist for the National Automobile Dealers Association.

"It's really more the incentives and, in some cases, new models," Mr. Taylor said, adding, "Gas mileage is clearly an issue this summer."

The most fuel-efficient gasoline-powered Liberty gets 18 miles a gallon in the city and 22 on the highway, compared with RAV4's 24 miles a gallon in the city and 30 on the highway.

The Honda CR-V, which had a 2 percent sales drop so far this year, gets 23 miles a gallon in the city and 29 on the highway.

Chrysler, however, is hoping Liberty sales get a boost from its latest incentives, a spokesman said. This month, Liberty customers will get employee pricing plus either 0 percent financing for 36 months or

$2,000 cash back.

The Liberty isn't the only Chrysler model that needs some help.

U.S. sales of Toledo Jeep Assembly's other product, the Wrangler, are down 13 percent so far this year to 35,265. That iconic SUV is being updated for the 2007 model year, with production beginning next week at a new $900 million multi-factory plant. The Liberty will be redesigned next year.

Overall, U.S. sales of the Toledo-born Jeep brand are down 6 percent so far this year compared with last, Mr. Taylor noted.

"That's a sign of their need to do something, and they're doing it," he said.

Ford has increased promotion of the Escape and its environmentally friendly hybrid version, for which Kermit of the Muppets is the official "spokesfrog." The company is pleased that the SUV continues to sell well despite an influx of competitors, said Mark Kaufman, Ford SUV marketing manager.

"The small SUV segment in general has been super competitive," he said.

The Escape holds a 12.4 share of that market, Mr. Kaufman said, and the RAV4 has 10.4 percent. CR-V is third with 10 percent, and Liberty is fourth at 9.7 percent, he said."We have a pretty sizeable lead."

Some Escape customers come to the showroom for the higher-priced hybrid version but leave with a gasoline version after realizing the fuel economy advantage is mostly in city driving, Mr. Kaufman said. A hybrid Escape gets 36 miles a gallon in the city and 31 on the highway, but the SUV's most efficient gasoline version gets 23 in the city and 26 on the highway.

To help increase awareness of the alternative technology, meanwhile, Ford has lowered the price of 2007 hybrid Escapes by $1,000, to $25,600, Mr. Kaufman said. The automaker, however, has no plans to increase production of hybrid Escapes while increasing such offerings overall, he said.

Chrysler sold a diesel version of the Liberty for about 1 1/2 years for those looking for better fuel economy. Yet that version has been discontinued for the 2007 model year because it would not meet stricter emission standards.

Contact Julie M. McKinnon at:

jmckinnon@theblade.com

or 419-724-6087.



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