An incredible journey

FCA Japan’s Jeep brand speeds past more major milestones

MAY 2021 Investing in Japan / Text by Toby Waters / Photos by Benjamin Parks

Back in 2009, Pontus Häggström, president and CEO of FCA Japan, learned an interesting lesson in business management: “Sometimes it’s harder to stop doing something than to start something.” That was the year he proposed dropping the moderately successful Dodge brand in Japan to focus on promoting Jeep — which, at the time, was selling roughly 1,000 cars a year.

When I stood up and made this proposal, telling our dealers we should aim to be selling 5,500 Jeeps annually, I could tell they thought I was nuts,” he says.

Häggström believed that Jeep had great potential in Japan, in part because of the growth of the SUV segment, in part because of the rich legacy of the brand.

“We were met with quite some internal resistance because all the brands were doing okay here. But we managed to sell our Jeep vision — and this was the start of an incredible journey,” he states. “We achieved our goal in just two years. So then, when I said our long-term goal should be to sell 10,000 cars a year, the dealers said, ‘Yes, we think we can do that’. Their motivation and confidence were incredible.”

In 2015, Häggström decided to further concentrate on Jeep by phasing out the Chrysler brand from the Japan lineup.

Jeep sales have continued to grow. But how has the brand managed to find such success in the Japan market?

A complete overhaul

The Italian automaker Fiat Group and the US automobile manufacturer Chrysler Group entered into a global strategic alliance in 2009, then merged to form FCA in 2014. This January, FCA merged with the French car group PSA and rebranded as Stellantis. It owns 14 major brands, including Alfa Romeo, Maserati, Abarth, Peugeot, Citroën, and the SUV maker, Jeep.

For the Jeep brand to grow in Japan, the firm had to first focus on the product itself. Häggström observed that there was a perception here that American cars were big, gas guzzling, and expensive, and this image needed to be addressed.

“We brought smaller cars, like the Renegade, and we chose smaller engines for Japan, so fuel economy has improved a lot. Today, we also offer electrified models in our range,” he says. “Regarding pricing, we’ve made sure all along that the Jeep range is affordable.”

How Jeep was marketed also had to change.

“When Jeep was first introduced to Japan, it was seen as a celebration of Americana. While there’s nothing wrong with that, Jeep is so much more than just a car wrapped in the American flag,” Häggström explains. “So, we really started focusing on the core values of Jeep: freedom, adventure, authenticity, and passion. Those values are universal.”

This year, Jeep celebrates its 80th anniversary. Häggström believes that its long history is key to even greater success for the brand.

“Japanese consumers like authentic brands, with stories and history, so we have reconnected with Jeep’s roots and celebrate what it stands for, more than its geographic heritage,” he says. “For 80 years, Jeep has been doing this one thing, building SUVs, and we keep doing it better and better and better.”

Even Häggström has been surprised by Jeep’s success here. For the past two years, it has sold more than 13,000 cars, making it one of the top-selling SUV brands in the country, and accounting for over half of FCA Japan’s sales in 2020. It has a total of 83 standalone Jeep dealerships across the country, all fully remodelled since 2016. The goal for this year is to sell 15,000 units.

To help the firm meet this target, Häggström points to one other factor that has been a key differentiator for Jeep: its dedication to the community of Jeep owners.

Part of the family

“Our former group CEO used to say that Jeep is not defined by us, but by Jeep owners,” Häggström explains. “That’s why we launched Real, our communication platform, in 2012. It allows us to connect directly with owners, and they tell the story of Jeep. When we share their stories, we’re not broadcasting something made by an ad agency, but the inside track of Jeep ownership. We’ve tried to create a real community around Jeep so it becomes more than just the vehicle — you become part of the Jeep family.”

Through Real, Jeep owners share their thoughts and stay engaged. Last year, there were 1.3 million visitors to the Real site.

Pictures that Jeep’s devoted customers submit have been used in advertisements at Shibuya station. Some were featured in the firm’s upcoming 80 Years, 80 Stories campaign, one of the ways it is involving Jeep owners during its anniversary year.

“We’re celebrating our 80th anniversary with a range of limited-edition cars — that’s not uncommon in our industry — but what’s different about us is that the Jeep community decided what they would look like,” Häggström says. “Thousands of people in Japan replied to an online poll on the colours we should choose, and we went with their choices. Again, the fans are shaping the brand and, not surprisingly, the limited editions are selling very well.”

FCA Japan is also finding ways to further expand its community. One example is that, at the outset of the Covid-19 pandemic, it introduced the Skip Loan to allow customers to buy a Jeep but only begin payments after six months. This was a great help to those seeking safe, personal transport during the early days of the pandemic, who also wanted to have a bit more cash on hand during those months of uncertainty, and it proved especially attractive to younger buyers.

“This kind of financing is quite popular in the US, but we were the first one to try it in Japan. We initially thought it would be a stop-gap solution, but it’s been so successful that we’ve kept it, and now it’s synonymous with Jeep,” Häggström says. “This really helps younger people, who really connect with Jeep. The Wrangler has the youngest demographic of buyers — not just among SUVs, but among imported cars as a whole.

“And, we are going further. Last year, we introduced the Jeep Wave programme, which is designed to make Jeep ownership fun and worry-free,” he adds. “The programme includes free maintenance, curated content, access to owner sites, and special offers for our growing community.”

Jeep has set out a plan to sell 20,000 cars annually as its next milestone. To make this goal a reality, it will grow its dealer network by 20% to 100 outlets. Even after 80 years, the incredible journey continues. •