Jeep has temporarily suspended production of its Wrangler and Grand Cherokee sport-utility vehicles in the United States. The move is only temporary, but the automaker doesn’t know how long that will last.
The pause could last several days, but it’s too early to estimate how many. Stellantis says it was a necessary action to improve operations in the United States without going into specifics and refers to the move as “production adjustments.”
The decision is in effect at two assembly plants, Jefferson and Mack in Detroit, where the Grand Cherokee is built, and at a factory in Toledo, Ohio, where the Wrangler rolls off the production line.
In June, both Jeep and Ram, brands under the Stellantis umbrella, had at least double the industry average of 76 days of inventory, which was estimated at the time. Last month, things weren’t looking up. Both Jeep and Dodge had more than four months of vehicle inventory, while the industry average was 68 days.
Overproduction, excess inventory, or the inability to sell must have led to excess inventory. Jeep is facing declining numbers. The brand's sales fell 21 percent during the first half of this year compared to the same period in 2023. In addition, overall market share fell 2 percent.
Photo: Stellantis
Jeep isn't the only Stellantis brand suffering from excess inventory. Alfa Romeo, Chrysler, and Dodge are all experiencing the same issues, so a production pause for any or all of them wouldn't be a surprise.
Despite slow sales, Stellantis has not announced discounts, while Ford and Tesla have set competitive discount strategies. According to analysts, the auto giant, under the command of Carlos Tavares, will have to cut prices to clear excess inventory. However, selling products below the already established MRSP would throw Stellantis into a financial hole. In addition, the brand must also deal with recalls on both lines.
The Jeep Wrangler and Jeep Grand Cherokee are two of the brand’s best-selling models. The brand sold 154,491 Wranglers in the U.S. last year, while only 77,204 have found owners eight months into 2024. Jeep sold 244,597 Grand Cherokees in 2023. This year, the automaker isn’t even halfway there, selling 106,750. Jeep dealers are complaining about bloated inventory, The Wall Street Journal reported, citing people familiar with the matter.
Photo: Stellantis
Update: Stellantis confirmed the production shutdown and announced that manufacturing will resume at some U.S. plants on Thursday. With the story having begun to unfold less than 24 hours ago, if it wasn't Sept. 5, it should be Sept. 12. The auto giant will continue to monitor the situation and assess whether further action is needed.