Jeep goes big on bet to go small


Jeep is betting that big things will come from a small package—in this case, the new Jeep Renegade, which made its public debut at the 2014 Geneva Motor Show last week.

The pint-sized sport utility vehicle is more than just the latest addition to the maker's lineup of sport utility vehicles. It's the anchor of an aggressive plan to take the Jeep brand global—a long-simmering strategy that, strangely, has only been pushed into high gear since Chrysler was taken over by Italy's Fiat following its 2009 bankruptcy.

The Renegade "will act as an entryway to our brand," said Jeep CEO Michael Manley, noting that compact SUVs make up one of the world's fastest-growing market segments.

A Jeep Renegade SUV, is driven on to the stage during its launch at the 84th Geneva International Motor Show in Geneva, Switzerland, March 4, 2014.
Chris Ratcliffe | Bloomberg | Getty Images

According to a recent report by consulting firm IHS Automotive, these so-called B-segment models—also known as superminis—now account for about 2.7 million in vehicle sales annually. Although demand in the U.S. lags well behind that in China and Europe, it's expected to grow here, as well, as buyers continue to downsize.

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In many ways, the new Renegade is a more traditional Jeep than the recently added—and somewhat controversial—Cherokee model. There are the brand's classic visual cues, including the upright, 7-slot grille, the high ground clearance, the short overhangs and tall roofline, which can make the Renegade look, at first glance, a bit bigger than it really is.

The Renegade Trailhawk model will continue to offer potential buyers the sort of off-road capabilities the brand has long been known for. But in this case, the mini-Jeep comes with a new terrain response system which, with a simple turn of the dial, adjusts the vehicle's brakes, throttle and transmission to automatically adapt to five different driving conditions, including rocks, snow, sand, or highway.

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There are other features that Jeep hopes will increase the Renegade's appeal. The new SUV is more lavishly equipped than most of the traditional vehicles that fill the segment. Renegade will be offered—depending upon the market—with an open-air roof system, big touchscreen infotainment system, a built-in WiFi hotspot, and an access package allowing remote starting and door unlocking, as well as access to sports scores, movie timetables and nearby fuel prices.

Jeep has become increasingly daring since parent Chrysler's tie-up with Fiat. Despite its polarizing design—or perhaps because of it—the new Cherokee has become one of the market's hot new entries for the 2014 model year. But in some ways, the Renegade is an even more radical departure from tradition.

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The underlying platform is a heavily modified version of the "architecture" used for Fiat's far less capable 500L crossover. And the two models will be produced on the same Italian assembly line, the first time a Jeep has been produced outside of North American in many years.

"One of the key constraints to our growth has been the absence of a global manufacturing footprint," Manley said.

If anything, that is changing in a hurry. The Renegade will also be produced in Brazil, and eventually China, which could become one of the biggest markets for the new model.

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Even before then, the brand's sales have been setting records. They rose 4 percent last year to an all-time global high of 731,565, and Manley pushed his forecast for 2014 from 800,000 to an even 1 million.

With the new Cherokee already drawing in buyers, Jeep clearly has momentum going for it. Now the new Renegade will have to prove it packs a big punch in a small package.

By CNBC Contributor Paul A. Eisenstein. Follow him on Twitter@DetroitBureauor at

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