Jeep plans swift expansion in Japan

TOKYO — Jeep, the American off-road icon that is booming in Japan, expects to notch another Japanese sales record on its way to boosting volume here by nearly half over the next three years.

The rapid expansion plan, rolled out Thursday, Jan. 14, by FCA Japan CEO Pontus Häggström, leans heavily on building out Jeep's dealer network to at least 100 outlets in Japan through 2023, from 82 today.

Over the next three years, Jeep wants to sell more than 20,000 vehicles annually in this notoriously finicky market, up from a record 13,588 in 2020. That total marked the seventh straight year of record sales in Japan for FCA's stalwart four-wheeling brand.

Despite the pandemic, Jeep's Japan sales notched a 1.7 percent increase in 2020. And Häggström forecast that sales will surge to 15,000 in 2021 as demand bounces back.

Jeep's success in the country underscores how a U.S. automaker can thrive in Japan with the right product and sales network. As Jeep surged ahead in the import sales rankings, General Motors scaled back its Japan lineup to Cadillac and just two models from Chevrolet, the Corvette and Camaro. Ford Motor Co. pulled out of Japan several years ago.

The Japanese ramp-up also shows how overseas markets are playing a key role in Jeep's global growth strategy and underpinning profits for FCA as it merges with PSA Group this month.

Jeep's worldwide sales grew fivefold in the past decade, from just 300,000 vehicles in 2009 to about 1.5 million in 2019. Japan is now the top buyer of Wranglers outside North America and is the brand's sixth biggest market in the world, Häggström noted.

"As the pandemic accelerated, Jeep managed to minimize the impact on sales far better than the competitors," he said. "Jeep outperformed the market, 10 out of 12 months."

Häggström cited several factors for those upbeat results.

First, FCA Japan keeps the lineup fresh with new nameplates and offerings, he said. It launched the Renegade 4xe plug-in hybrid this year and is rolling out a lineup of 80th-anniversary Jeep models. The company also catered to local demand by introducing engine downsizing and factory-installed Japanese navigation systems.

FCA Japan also has invested in expanding and upgrading its dealer network. In 2020, it opened 23 new or renovated outlets for all its brands, including 11 undeveloped sites.

In addition, FCA Japan leverages innovative marketing and sales strategies. It shifted to digital marketing a decade ago, long before most rivals in Japan. And last year, it adopted a deferred-payment plan dubbed "Skip Loan" that allows customers to skip up to five months of payments and pay later. Such offers were virtually unknown in Japan, and they proved to be a big hit.

Jeep is the hero brand of FCA Japan, which also sells Fiat, Alfa Romeo and Abarth — marketed here as a separate marque. Even as Fiat and Alfa Romeo sales retreated in 2020, Jeep's advance limited the group's overall sales slide to just 2 percent.

That enabled FCA Japan as a whole to lift its share of Japan's import market to an all-time high of 9.3 percent in 2020 — from 8.1 percent a year earlier.