Development of the Jeep Grand Wagoneer -- the $100,000-plus, premium, three-row SUV the FCA brand intends to slot against competitors’ top-end SUVs -- has been placed on hold, two supplier sources say.
Fiat Chrysler won’t comment. Autoline Daily reported last month that the vehicle has been scuttled. But that’s not the case. It has been placed on hold.
I have two strong suspicions of what’s happened, and they involve cash and the Commander.
Let’s start with the easy one to deal with: cash.
FCA doesn’t have any to spare.
The company, now six years into a recovery, remains the only major automaker in the world with more debt than cash. It’s working diligently to right its accounts, including a promise to get to less than 5 billion euros of net debt by the end of this month.
Auto manufacturing remains a particularly expensive undertaking, even more so when a company actually has to develop new products. Right now, in addition to an all-consuming push to bring Alfa Romeo back from the dead (see photos of the Giulia and Stelvio, since you can’t actually see either of them yet at an Alfa dealer in the U.S.), FCA’s U.S. engineering teams are working to finish a redesigned Ram 1500 pickup, a retooled Jeep Wrangler and a Wrangler-based pickup.
Then there is the factory shuffle going on to allow the company to build more pickups and SUVs. Assembly plants in Sterling Heights, Mich., and Toledo, Ohio, must be retooled to switch from unibody construction to body-on-frame products. That doesn’t happen for free.
U.S. sales of the Grand Wagoneer first were scheduled to be launched in 2018, then were pushed back to 2019. Why slap a hold on development of what promises to be a profit-rich luxury SUV in an SUV-crazed market?
My guess, from reading the recent tea leaves, is that Jeep’s talented team of designers, given the constraints of the program -- especially limits on the size of vehicles that can be produced at the company’s Jefferson North Assembly Plant in Detroit -- came up with the wrong product aimed at the wrong competitor.
Remember the Jeep Commander? Both FCA and Jeep would rather you forget.
Since the idea of resurrecting the Grand Wagoneer nameplate arose in 2014, FCA executives have said that the brand’s luxury SUV would share a unibody platform with a redesigned Grand Cherokee.
Functionally, that means adding a third row to a stretched two-row platform, then trying to luxe it up sufficiently to compete with the likes of Land Rover while keeping it off-road capable enough to wear a Jeep badge. That was the original recipe for the Jeep Commander, which failed miserably in large part because its third-row seating was unusable if you had legs.
The Commander was Land Rover size, and the current Grand Cherokee and Dodge Durango are their current sizes, because that is all that will fit at Jefferson North Assembly without expensive retooling.
Remember, Jeep brand head Mike Manley this year floated a top-end price for the Grand Wagoneer of up to $140,000 -- a price point that will limit volumes in Jeep’s largest markets and make amortizing development costs that much harder.
When you add the cost of retooling FCA’s Warren Truck Assembly Plant in Michigan from body-on-frame to unibody to build the Grand Wagoneer, or retooling Jefferson North to be able to build a bigger SUV, the business case for the unibody Grand Wagoneer becomes very dicey indeed.
But there is another, less expensive way. Imagine instead a Jeep Grand Wagoneer aimed not at Land Rover, Mercedes or Bentley, but at the Chevy Suburban and GMC Yukon.
Built body-on-frame and co-developed with the next-generation Ram 1500, the Grand Wagoneer would retain all of its off-road capabilities -- the Ram already borrows liberally from the Jeep off-road parts bin -- but with ample third-row seating and storage.
Such a Grand Wagoneer would also require far less money to retool Warren Truck and would promise greater volumes, a potential lower price point and a large audience of General Motors-loyal-but-Jeep-curious customers for dealers to plunder.
If covering FCA for a decade has taught me anything, it is that the company has its own internal Occam’s razor: If there are two choices, and one is cheaper and easier, that’s the choice FCA will make.
Let’s see if that’s the case with the Jeep Grand Wagoneer.