2021 Auto News Indian automobiles

Jeep to go electric in India. Will it work?

Credits: www.fortuneindia.com

Jeep, the iconic American SUV brand, is revamping itself for India: it will pivot towards the EV space. But, the process will not be easy and Jeep is likely to face stiff competition in the space.

Jeep has been witness to a long and fruitful journey. It started its life as a pick-up vehicle for agricultural purposes, but slowly evolved into an iconic four-wheel vehicle for the rugged outdoors.Today, Jeep is pushing harder and deeper into the Indian market with a new mid-21st century avatar—as a refurbished electric vehicle (EV).

Jeep’s leadership spoke at a closed-door international roundtable press conference recently, and its management acknowledged that expanding their portfolio was key to success. At the moment, Jeep only sells its SUV model, Compass, in India. It also imports its other SUV brand, Wrangler, which is a CBU model. In a CBU, or Completely Built-up import, the parts of an automobile are imported for a final assembly which is done locally.

So what exactly is Jeep’s strategy for going electric in a country like India where it is not mainstream.

“It’s pretty clear and it won’t be the same as everywhere but it will depend on how much the government promotes it and how fast the grid will be developed. Markets like Japan, Australia, and Korea are going to be quickly electrified and even while they are behind the U.S. and Europe,” Christian Meunier, Global CEO for Jeep, tells Fortune India. “I am going to push for it as a leader and not as a follower and we will do everything we can in all our regions to make that happen,” he adds.

Meunier also points out that by 2025, all segments will be having a full electric Jeep model in their portfolio.

“That is a big commitment,” he says.

Yet, in India, Jeep has more room to grow where its volumes are still small. Their volumes, which were higher at around 20,000 units a year when they entered the market in 2018, have dipped to an average of about 10,000 now, with them barely crossing a total sales of around 50,000 cars this year in toto. So what is the management’s vision for the future?

“We are investing in India, we have put in $250 million here and will bring four localised products as a brand. We will give the Indian dealers a chance to be successful to grow and be successful, and in 18 months time will have two cars in the premium and [other] two in the mainstream segments. That will be significant,” Meunier says.

The positive for Jeep is that it is the only brand of the erstwhile FCA (Fiat-Chrysler Automobiles) group—now a division of the Netherlands-domiciled Stellantis—which has found acceptance in India.

“Jeep has not been able to take advantage of the explosive growth that the SUV segment has seen, despite it being its staple segment, and Jeep would very much like to correct that,” argues Suraj Ghosh, principal analyst, South Asia Powertrain Forecasts, IHS Markit.

The passage, however, to break into the already fiercely competitive SUV market in the subcontinent won’t be easy for a multitude of reasons.

For one, they have an absence of products in some segments which saw higher growth such as the sub-4m SUV, says Ghosh. Ghosh also points out that for Jeep’s flagship brand, Compass, the price-feature-value matrix failed to resonate with the customers, compared to what was being offered by some Korean automotive brands.

The Compass, which although was critically acclaimed, is priced at ₹30 lakhs on road for the fully loaded version, compared to say the Hyundai Tucson priced at around ₹24 lakhs.

The Grand Wagoneer, a new launch, is, similarly, going to be expensive and the EV version won’t be very affordable either. But, it isn’t something that perturbs Meunier. “An outdoor SUV that drives in silence, with strong acceleration, is a never-before-seen product. Although there will be a limited client base for it, it will be a dedicated one,” he says.

Meunier adds that ICE engines will remain lower in cost than EVs for the foreseeable future but will, thanks to the pressure from environmentalists and governments, be eventually replaced by EVs or hybrid systems.

But with the coming of electric, will Jeep’s iconic rugged outdoor design alter?

Mark Allen, head of design for Jeep, says that what electric vehicles do is allow designers the ability to move certain design elements around and it will allow a shorter hood, front storage, and move the wheels forward in a better position on a platform that couldn’t be done before. “It can make it more efficient. The battery pack is a new thing and it will get more efficient in size for the future,” he says.