Insatiable Demand and Lacking Supply Drives Chinese Jeep Prices into the Stratosphere
Models Selling for More Than Triple U.S. Price
Despite being one of the first American brands to set up shop in China, Jeep is having trouble meeting demand in the fast-growing SUV-crazed market. A combination of steep import tariffs and a lack of local production -- the last Chinese-made Jeep rolled off the line in 2006 -- restricted sales to just 19,013 units in the fast-growing and SUV-crazed market. By comparison, GM sells that many vehicles in just three days.
The restricted supply has driven prices to stratospheric levels. According to Bloomberg, a 2012 Jeep Grand Cherokee starts at a whopping $91,064, with the price for an SRT8 going up to an eye-watering $189,750. In the U.S., those prices are $27,920 and $56,220, respectively. Making things more difficult yet is Jeep's lacking dealer network. The brand has just 120 dealers in China, even though there are 1500 officially-authorized merchandise outlets in the country.
To rectify the situation, Jeep is looking to tie-up once with a local automaker, having lost its previous partner in the aftermath of its divorce from Daimer. The most logical choice is Guangzhou Automobile Group, which already ha a deal with corporate parent Fiat, but it would take roughly 18 months for production to begin after a deal is made due to China's regulatory approval process.