Recalls hurting Grand Cherokee sales, admits Jeep

Jeep has admitted the Grand Cherokee's sales slump of more than 25 per cent this year – when overall SUV sales have increased by almost 15 per cent -- is due to supply issues and negative publicity over the model’s numerous safety recalls.

Fiat Chrysler Automobiles Australia boss Pat Dougherty said that while low stock was the primary reason for the slower sales this year, recalls have also affected the popularity of Jeep’s flagship model.

“I think it would be naive to say that those things [recalls] don’t impact your business," he told motoring.com.au at last week’s Chrysler 300 launch.

Since its introduction in 2011, the current-generation Grand Cherokee has amassed no fewer than 11 safety recall notices – including two in 2013, eight last year and one so far this year – making it one of Australia's most recalled vehicles ever.

Key issues that have prompted the recalls range from the potential for fuel pump relay failure, unwanted side airbag or seat airbag deployment, anti-lock brake or stability control system failure and poor braking performance due to brake booster corrosion.

North America's National Highway Traffic Safety Administration (NHTSA) is a key driver of recalls, Dougherty believes.

“One of the biggest issues we’ve had is, having a recall is not a problem per se — in fact recalls are going to expand going forward because the NHTSA’s become very strident in saying ‘we need to have anything that could arise out of any potential issue fixed’.

“The fact that they now have made public statements about that fact that the [US] federal government prosecuting criminally the General Motors folks in the ignition switch issue... I think anyone sitting in a safety compliance office of a motor manufacturer is probably much more sensitive about pushing a button on a recall.”

According to Dougherty, increasing numbers of recall notices will also become a fact of life with modern vehicles due to their complexity.

FCAA moved last week to assure Australian owners that they could not be affected by hackers in the same way that a Jeep Cherokee was successfully disabled while driving on a US highway last week because no vehicles sold outside the US are fitted with an external phone connection.

On Friday, Jeep recalled 1.4 million Jeep, Chrysler, Dodge and RAM vehicles in the US fitted with 8.4-inch Uconnect infotainment touch-screens to apply a software patch that prevents remote control of vehicle systems via their internet-ready radios.

“I don’t think recalls need to be a bad thing," he said. "I think that when you need to have a software update, it’s really no different than your iPhone or your computer. These vehicles are becoming so technology-laden that they are going to continuously need to be upgraded. That is sometimes going to come in the form of a recall.”

Dougherty said that FCAA has also improved they way in which recalls are managed.

"Do I think those could impact your business? Absolutely. What I believe more is that we didn’t manage them more as a company, and that on a go-forward basis I think you’ll see different management coming out of our shop concerning recalls.

“We’ve made a very concerted effort to change our customer care approach, how we manage our customers across the country and how our dealers mange the customers."

However, the local Jeep boss said the key reason for the decline in Grand Cherokee sales was insufficient production of a key volume model — the Laredo diesel — following high global demand for the variant.

“Global demand was so high early in the year, so we knew that we were going to be down, partially because of production," he said.

"We couldn’t get them, we couldn’t get exactly what we wanted to sell in the marketplace. I think the demand for Laredo diesel was higher than our ability to bring them into the country at the time. I think we’ve presently resolved that issue.

"That was the highest running vehicle and obviously because we didn’t have as many in inventory that suppressed our sales a bit — because they would go out as fast as we brought them in.”