The handsome SUV strikes the right chord with buyers in India, helping FCA India gain a 2.10 percent market share and an estimated Rs 4,000 crore in revenues from domestic market sales.
20 Apr 2018 | 14665 Views | By Mayank Dhingra
Iconic American utility vehicle marque, Jeep, has had to wait a while before achieving success in the competitive Indian marketplace. Having entered the Indian market in August 2016 with its flagship global offerings, the Jeep Grand Cherokee and the Jeep Wrangler, it found that sales were not exactly to its ...
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Iconic American utility vehicle marque, Jeep, has had to wait a while before achieving success in the competitive Indian marketplace. Having entered the Indian market in August 2016 with its flagship global offerings, the Jeep Grand Cherokee and the Jeep Wrangler, it found that sales were not exactly to its expectation, the exorbitant CBU pricing not doing any justice to the two capable machines even though the Jeep brand commands a cult status in the country.
Fast forward to June 1, 2017, when the first locally manufactured Jeep Compass officially rolled off the assembly line at the company’s Ranjangaon plant.
A month later, FCA India introduced the highly localised (65%) Jeep Compass compact SUV in the country. While a lot was at stake, it priced the crossover almost perfectly, that it went on to become an instant hit, helping FCA (Fiat Chrysler Automobiles) get good traction of the booming UV market in India.
20,000 Compasses and a quick 2 percent market share
Between July 2017 and March 2018, the Compass has gone on to cumulatively sell 19,358 units, averaging 2,150 units every month and 71 units every day. Thus, now with three weeks into April, its wholesales have clearly surpassed the 20,000-unit mark in the domestic market.
Where FCA India’s UV market share was non-existent prior to its launch, the Compass saw the company gain a 2.10 percent market share in FY2018, where overall industry-wide UV sales stood at 921,780 units (FY2017: 761,998 / +20.97%).
FCA India received over 10,000 bookings within just one month of introducing the SUV, and with an annual production capacity of 160,000 units at its Ranjangaon facility (near Pune), it had to ramp up daily production to two shifts and to six days a week, to cater to the strong demand.
What helped the American carmaker achieve the tight pricing of the SUV, has been its bigger strategy of leveraging economies of scale with large amortisation volumes by making India a global hub for exporting the Compass to its key right-hand-drive markets around the world.
First batch of Jeep Compass SUVs for despatch to Japan and Australia in October 2017.
The company exported a total of 6,716 units of the SUV in FY2018, with its first consignment of 600 units going to Australia and Japan in October 2017. The Jeep Compass is also being exported to the UK, New Zealand and South Africa. Thus, the SUV’s total domestic and export numbers closed at 26,074 units by the end of FY2018.
FCA, which was operating through a lean network of a handful 50 stores across 47 cities in India, had to also expand to 60 outlets by the end of the 2017 calendar, seeing the surging demand for the SUV.
80% sales from diesel Compass, Rs 4,000 crore in revenues
While the aggressively priced Jeep Compass range in India starts with the 1.4 Multi-Air turbo petrol ‘Sport’ 4x2 variant with a 6-speed manual transmission, priced at Rs 15.16 lakh ex-showroom, Delhi, it is, however, the top-end ‘Limited’ trim, which brings in the chunk of the sales. The Limited variant comes with options of either a 2.0 MultiJet turbo diesel motor with a manual transmission, or the same 1.4 Multi-Air petrol, but, only with an automatic option.
Fuel-wise sales statistics reveal that it is the diesel-engined Compass which is taking the crown, contributing to 80 percent of the SUV’s sales with a total of 15,442 units until the end of FY2018. The 2.0-litre MultiJet unit in the Limited 4x2 guise has been the most popular trim with buyers. While the petrol version has sold 3,916 units in comparison, it is the automatic transmission, which is one of the major factors in play for the considerable numbers of the petrol powered Compass. The SUV, however, is soon expected to see a diesel automatic as well, slated to be launched in the coming months.
With average pricing in either fuel options of the top-end Limited trim being around Rs 20 lakh, a simple math exercise reveals that FCA India has accrued revenues of over Rs 4,000 crore from the Jeep Compass in FY2018 from only domestic market sales, where its total investment in the project is pegged at Rs 1,769 crore, targeting to settle the localisation content to around 70 percent. The Compass, then, has come out to be true to its name, giving a new direction to the company.
UVs are undoubtedly the new penchant of car buyers, and the Jeep Compass story could very well set a precedent for many upcoming new players in the market, giving them the cue to emulate the success, on just the right grounds.
Also read: Top 5 UVs – FY2018 | SUV-ival of the fittest
India to play key role in FCA’s global Jeep growth plan