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Published: Sunday, 4/20/2014 - Updated: 5 months ago

Renegade to be first Jeep sold, not built, in North America

Model’s mixed heritage reflects international nature of industry

BY TYREL LINKHORN
BLADE BUSINESS WRITER

The Fiat 500L was introduced to U.S. buyers with TV commercials that featured a Paul Revere character storming the colonial countryside on horseback, excitedly hollering that the Italians were coming.

The ads were clever and generally well received — but don’t bet on anything similar in touting Fiat Chrysler Automobiles’ upcoming import to America.

We’re not talking Alfa Romeo or Maserati, here. This time, it’s a Jeep.

Starting late this year, the subcompact Jeep Renegade will begin arriving in U.S. dealerships. Fiat Chrysler plans to build the Jeep alongside the upcoming Fiat 500X at a Fiat plant in Melfi, Italy.

The Renegade will be the first Jeep to be sold in the United States that isn’t built in North America.

RELATED ARTICLE: Fiat Chrysler to build 3 Jeep models in China

Jeep officials weren’t available for an interview last week. But in press materials promoting the new model, Jeep says the SUV is designed in America and crafted in Italy, showing the brand’s dedication to the global market and the depth of its resources.

If it sounds like Jeep’s marketing team is trying to walk a fine line between recognizing the company’s new global footprint without losing its American clout, they probably are.

“There is a patriotic angle to the [Jeep] brand, an American angle to it. There’s no question about that, and it’s possibly more than any other brand,” said Tom Libby, an analyst with IHS Automotive.

However, Jeep’s parent company, Chrysler Group LLC, is no longer wholly American.

The Chrysler-Fiat matrimonio was born in 2009, when Fiat SpA took a 20 percent stake of Chrysler as it emerged from bankruptcy. Fiat gradually increased its ownership until the union was fully consummated earlier this year with Chrysler becoming a wholly owned Fiat subsidiary.

That has brought with it two big questions: Are Chrysler and its brands still truly American, and are consumers likely to care if they’re not?

Experts say the answer to both is the same.

Not really. 

Global firms

Mr. Libby calls Chrysler a global company now. But hold the cheers, GM and Ford fans. Mr. Libby has the same designation for the other two pillars of what once was Detroit’s Big Three.

“That whole concept is really obsolete,” he said. “All of these major companies are global in nature.”

A few decades ago, it was easier to say a car was American, Japanese, or German.

Today, Chevrolet builds cars in Mexico, Honda builds them in Ohio, and BMW builds SUVs in South Carolina that it sends back across the Atlantic to sell in Europe.

Parts come from all over the world. Land Rover and Jaguar still have their British accent, but they’re owned by Tata Motors in India. That Italian Fiat 500L? It’s built in Serbia.

So for those who demand an “American” car, it can be a difficult order to fill.

“When you’re sitting down and saying what’s an American car, what’s a non-American car, it’s tricky,” said Frank DuBois, an associate professor of international business at American University in Washington. “There’s a lot of factors here.”

For the last two years, Mr. DuBois has compiled a made-in-America auto index that attempts to go beyond the American Automotive Labeling Act that requires car companies to say how much content from the United States and Canada is in each vehicle.

Mr. DuBois goes further, looking at where the car is assembled, where research and development are done, where the engine and transmission are made, where other major components come from, and where the company is headquartered.

That last category cost Chrysler Group vehicles in the 2014 rankings, with the Jeep Wrangler falling from a fourth-place tie to a tie for eighth. The Ford F-150 is ranked No. 1. 

‘It’s a blend’

So, how does he view Chrysler’s citizenship?

“I argue it’s quasi-American. It’s a blend,” he said. “It’s kind of like if your mother’s from Germany and your father’s from France, what are you? You’ve got a situation [with Chrysler and Fiat] where your last name is Italian but you’ve got American genetics.”

More than other foreign-owned companies, Chrysler has major design, research and development, and marketing operations in the United States. It also builds most of its vehicles here, he notes.

In Mr. DuBois’ rankings, the Jeep Cherokee is 10th, followed by the Patriot. 

Public perception

While companies play on the connections that most help their marketing identity, in reality most people who aren’t academics, automotive journalists, or union stalwarts don’t care.

“I think the overwhelming majority of people are oblivious or apathetic about where their vehicle is built,” said Karl Brauer, an auto analyst with Kelley Blue Book.

Mr. Brauer suspects that will largely be the case with the Jeep Renegade.

“You’ll never know if one specific buyer cares about that, but at the end of the day I’m always going to be a fan of great product, and I think that’s what most people are,” he said. 

Selling the product

Jeep sales certainly haven’t lagged under Fiat’s control.

The brand set a worldwide sales record of 731,565 last year and is gunning for 1 million sales this year.

Here in the United States, Jeep can barely build enough Wranglers in Toledo, the Cherokee is off to a strong start, the Grand Cherokee continues to sell well and even the dated Compass and Patriot models are gaining ground. Through March, U.S. sales were up 44 percent to nearly 146,000 vehicles.

Jeep officials say the Renegade will help bring new customers into the lower end of the brand. Analysts don’t expect it to take sales away from other U.S.-made Jeeps such as the Cherokee and Wrangler, both of which are built here in Toledo.

While U.S. auto workers are always eager to have more work, Bruce Baumhower, president of United Auto Workers Local 12, isn’t too troubled by the idea of the small Jeep being imported for sale.

“It bothers me just a little bit, but when you think about the product they’re making, it’s a small segment,” he said.

“We want to build the midsize stuff and the large stuff. We’re operating in the biggest part of the SUV market here in Toledo.”

The Fiat plant where the Renegade will be built is unionized. 

Born in Toledo

Though the Jeep story is uniquely American, the book has more than a few chapters written from afar.

Jeep was started by Willys-Overland in Toledo in 1941. In the years since, Jeep has been owned by Kaiser Motors, American Motors Corp., and ultimately Chrysler.

While part of AMC, the French Renault company became the controlling shareholder. And later Jeep was a part of Chrysler when the company merged with Daimler-Benz of Germany.

“It’s just this kind of ongoing history for Jeep to be passed around by different parent owners with different geographic headquarters at the top of their organizational charts,” Mr. Brauer said.

Jeep has soldiered on through all of that, in spite of not being well understood by some of its owners.

Automotive historian Pat Foster said neither Renault nor Daimler had a good grasp of the brand and what made it unique.

Mr. Foster is much more keen on Jeep’s current owners.

“Sergio Marchionne gets it,” he said. “He understands the Jeep brand and he wants to build it into a truly global brand. I think at the rate he’s going and the ideas he’s got, Jeep could be an enormous brand in just a few years.”

Mr. Foster has written three books on the brand, with a fourth called The History of America’s Greatest Vehicle due out June 15.

He also has some practical experience, having sold Jeeps at an AMC Jeep Renault dealership in Derby, Conn.

Some buyers would ask how things were going with French ownership, but nobody said they were put off so much that they wouldn’t buy one.

“That really didn’t affect anything on the retail level,” he said. “People didn’t care.”

Nostalgic about Jeep, Mr. Foster does wish it was still completely American-owned.

But at the same time, he understands that without Fiat’s intervention Chrysler would have disappeared and Jeep likely would have ended up in foreign hands anyway.

As for the Renegade, Mr. Foster doesn’t see hard-core Jeepers lining up to buy one because it’s not made in the United States. However, that’s not the market Jeep is targeting with Renegade.

They see Renegade as a way to bring new buyers to the brand. Analysts figure Jeep will get incremental sales growth in the United States with the Renegade, but say China may prove the biggest market for the new vehicle.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134 or on Twitter @BladeAutoWriter.



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