By on August 10, 2017

Jeep Trackhawk

One of my favorite writers once ruefully noted that “in the end, whether you are loved or not is determined by the shape of your skull.” To which I would add: and the way you know you are loved is whether or not somebody will take out their wallet for you.

Being a wife usually pays better than being a mistress, which pays better than being a girlfriend, which pays better than being a Tinder date. Not that money is precisely equal to love — but in most cases cash speaks louder than poetry.

For that reason, it’s fascinating to use pricing as a window into human desire. With most consumer goods, of course, there are two prices. There’s the MSRP, which is fantasy, and there’s the “street price,” or actual transaction price, which is reality. The sticker price of a new Impala or Taurus or Sonata is considerably above the price that the vast majority of people are willing to pay, but on a 458 Speciale it’s a screaming bargain. These are exceptions that prove a surprising but durable rule: most of the time, automakers price their cars remarkably close to market reality. We take this for granted when in reality it’s proof of just how much intelligence and effort goes into product planning. Consider the fact that Rolex is widely acknowledged as having the lowest discount rate of any major watch brand, yet it’s usually possible to get between 10 and 20 percent off sticker at most dealers. That same amount of pricing flexibility gets Bloomberg in a tizzy when it’s applied to mass-market cars.

Assuming, therefore, that we can usually rely on manufacturer pricing as a rough yardstick for consumer desire, it’s absolutely fascinating to see how Fiat Chrysler Automobiles positions its most powerful sedans and SUVs. It is also very depressing for anybody who believes in an automotive future that contains anything but jacked-up Me-Too-Iguana-Boxes.


You can get a 707-horsepower car from FCA three different ways. The two-door Challenger Hellcat starts at $64,195, exclusive of destination. The four-door Charger Hellcat is $67,745. This pricing distinction has always tickled me.

Although I know in my heart that it’s because the automatic-transmission-only, considerably more spacious Charger is simply more popular with the drywall contractors and restaurant franchise owners that seem to make up the majority of the Hellcat owner base, what I want to believe is that it represents a shout-out to those vintage days of full-sized American sedans when the price structure went:

* two-door sedan (cheapest)
* four-door sedan
* two-door hardtop
* four-door hardtop (if you could get one)
* convertible
* station wagon (most expensive)

In truth, the last gasp of that strategy ended when General Motors’ B-body coupes disappeared in 1983. Ever since then, getting a couple extra doors has generally cost more. Happily, the Challenger adheres to the old rule, and if the relative lack of updates to the car compared to the Charger’s two substantial facelifts has anything to do with this situation, I don’t want to think about it.

With the old SRT8 cars, the pricing went: Challenger -> small gap -> Charger -> small gap -> Magnum -> small gap -> 300C -> large gap -> Grand Cherokee. This was significant because it suggested a mid-sized SUV was more prestigious, and therefore deserving of a higher price, than a close-to-full-sized luxury car. What’s amazing is just how large the gap is. In 2013, going from a Charger SRT8 to a 300C SRT8 cost you $5,000. I drove both of those cars at their media intro and I can tell you that then, as now, the price difference between a Charger and a 300 is absolutely worth spending just for the massive improvement in the touch points and seats. The gap between the 300C SRT8 and the Grand Cherokee? 12 grand.

Viewed in that light, the new Grand Cherokee Trackhawk is fairly priced. It is $85,900, just 18 grand over the Charger. That’s basically the gap between the Charger SRT8 and Grand Cherokee SRT8 back when both of those cars were the top dogs in their respective lineups. Here’s where it gets weird, though: The price gap between the similarly-equipped Charger SXT and Grand Cherokee Laredo is… wait for it… $400. Four. Hundred. Bucks. If you add 4WD, which of course the Trackhawk has as standard, the gap widens to $2,700.

Honestly, given the massive gulf in capability and quality between a Charger SXT and a JGC Laredo, you’d be silly to buy anything but the Jeep. That’s reflected in private-party sales numbers. But if FCA can wave its magic wand and turn a Charger into a Grand Cherokee for a few thousand dollars at the low end, why does that swell to 18 stacks up at the summit? Your guess is as good as mine, but here’s my guess just for the hell of it. I bet that the vast majority of Charger SXTs go to rental fleets for a transaction price that is much closer to $20K than $30K, while the vast majority of Laredos are sold to customers near sticker. So the true price gap is closer to 10 grand than two.

Furthermore, there is the unpleasant but undeniable fact that wealthier American families will pay more for SUVs than they will for any other form factor. As loyal TTACers know, your humble author just availed himself of a Silverado 1500 LTZ 6.2 Crew Cab Long Bed with a sticker price of $59K. Any guesses as to how much the equivalent Suburban Premier costs? Adjusted for equipment, it’s $72,500 — and that is without the 6.2-liter. If you could get the 6.2 in that truck, which you cannot, it would be $76K, for a total of $17,000 in “Suburban tax.” Does that number seem suspiciously similar to the “Trackhawk Tax” you pay when you swap out a Charger Hellcat for a Jeep Hellcat? Like I said, the product planners are very smart people most of the time.

You can smile at this as either a triumph of good old-fashioned American marketing, or you can worry about what will happen when the cheap fuel runs out and what Father John Misty calls the “permanent party” comes to a halt.

If our domestic and quasi-domestic automakers are having trouble keeping the lights on with a $17,000 markup on their most popular high-end SUVs, what’s going to happen when the market for those vehicles disappears? Can FCA survive on Renegades alone? Or is the Trackhawk Tax less a reflection of how much America loves the SUV and more a symptom of how much American automakers desperately need it to exist?

[Image: Fiat Chrysler Automobiles]

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40 Comments on “No Fixed Abode: The Trackhawk Tax...”


  • avatar
    PrincipalDan

    Jack, whatever happened to your Dad’s 2wd V6 Grand Cherokee? I know he’s a fiscally responsible guy, did it end up being a reliable buy for him?

    When I think about my next car purchase the “American Land Rover” keeps wandering into my thoughts.

  • avatar
    Detroit-X

    “Not that money is precisely equal to love — but in most cases cash speaks louder than poetry.”

    Agree. Some women in my past I would not take on those epic, road-trip vacations, or a movie, or a dinner, because they simply didn’t deserve the cash outlay. Instead, I would buy them a double. The hidden effects of a double, magnify the ‘lay’ part, of cash outlay.

  • avatar
    Toad

    “or you can worry about what will happen when the cheap fuel runs out”

    There does not seem to be any signs of fuel getting much more expensive anytime soon; we are probably closer to peak demand than peak oil. Each time oil moves over $50/barrel a bunch of spigots open all over the world and prices settle down again. “Drill Baby Drill” was not such a dumb idea after all.

    Of course, if North Korea pops a EMP over us this afternoon fuel prices will be the least of our concerns…

    • 0 avatar
      JohnTaurus

      $8/gallon. Any. Day. Now.

      The Prius shall rise again and kill all those gaudy American trucks/SUVs with its mighty sword! (They one they obviously used on the clay model of the current iteration before the design was frozen.)

    • 0 avatar
      JMII

      A hurricane in the gulf could easily spike prices again. However I doubt Trackhawk buyers worry about such things.

  • avatar
    JohnTaurus

    “If our domestic and quasi-domestic automakers are having trouble keeping the lights on with a $17,000 markup on their most popular high-end SUVs, what’s going to happen when the market for those vehicles disappears?”

    Which automaker is having trouble keeping the lights on? I believe Ford and GM are operating in the black right now. FCA is in worse shape than Ford or GM, but I don’t see them as being on the brink of disaster. Don’t you think its a little early for a generalized domestic automaker deathwatch?

    And, of course they’re stupid for selling trucks and SUVs and not offering anything else. Don’t they know *everyone* wants cars?

    • 0 avatar
      Toad

      The Dodge Dart is due for a comeback. Any minute now.

      Or the 200.

    • 0 avatar
      krhodes1

      Plus let’s face it – those in the market for $70K Suburbans are probably not particularly sensitive to the price of gas. Though they sure do love to b!tch about it when the price goes up.

      It was the folks driving the cheap gas-sucking BoF SUVs that got hurt last time gas prices spiked. But those things have morphed into CUVs that don’t get THAT much worse mileage than a car. Because they are cars, just jacked up. In both the literal and figurative sense. :-)

  • avatar
    PandaBear

    This is exactly what Intel did back when every CPU comes from the same mask and equipment but locked to different speed, actually even worse because they are totally the same cost, no extra metal or leather like the cars and trucks.

    The reason is demand. You cannot sell more high end stuff at a profit margin you demand. So they have to cut the supply and sell the low end and mid range stuff as well.

    Poor ramen eating college kids will overclock, enterprise customers will just pay up.

    • 0 avatar
      srh

      AKA price discrimination. Despite the name, it’s a good thing. When your manufacturing costs are fixed but the R&D costs are high, you can recoup your R&D costs from high margin sales while bringing similar technology to lower-cost customers, which margin would never otherwise warrant the R&D.

      Of course the buyers of lower margin parts get outraged, because they perceive that they’re being ripped off by being given a “crippled” part. That’s because they are ignorant and do not realize that the only reason they get what they’re getting is because it’s crippled.

  • avatar
    JimZ

    “Being a wife usually pays better than being a mistress, which pays better than being a girlfriend, which pays better than being a Tinder date. Not that money is precisely equal to love — but in most cases cash speaks louder than poetry.”

    I like Louis C.K.’s take on his (and my) situation:

    “Being single at 40 is like having a ton of money from a country which doesn’t exist anymore.”

  • avatar
    Boxerman

    will we see 10-15k discounts on trackhawks like we saw on hellcats once the smoke clears and there are few sitting on dealer lots?

    What will a 2019 trackhawk sell for when the 2020 model is due?

    If you dont have to have it now, a year or two from now a trackhawk may be great deal.

    • 0 avatar
      jh26036

      Plenty of leftover 2016 Grand Cherokees SRT with nearly $10k in discounts.

    • 0 avatar
      dmoan

      I always find it curious when people spend 10k+ more than base and expect resale value to hold, if you are buying new getting base is the way to go if you want to minimize depreciation. In other hand buying used you can afford to go for higher trim…

      • 0 avatar
        Meko_Suko

        Perhaps you want to clarify that you mean base OPTIONS vs. PREMIUM options (not TRIM).

        The depreciation on most base MODELS is substantially higher than that of their top trim counterparts:

        Here are 5 examples of run of the mill cars and their high trim counterparts:
        Mustang vs. GT350
        Camaro vs. ZL1
        Challenger/Charger vs. SRT8 or Hellcat
        BMW 3 or 4 Series vs. M
        Ford Focus vs. ST

        You stand to save more in depreciation across any one of these than had you purchased the base version. The M car is probably the weakest of all of these but still better than a BASE 3 or 4 series.

  • avatar
    sportyaccordy

    You can’t wish SUVs away. When gas spikes people will most likely just hold on and suck it up as they will get gaped and hosed on trade in.

    Plus the Trackhawk is a mega outlier. Most SUV buyers aren’t lining up for teenage gas mileage and CR-V MSRP first year depreciation. All the Trailhawk reflects for FCA is their desperate need to reprioritize. But they revamped their small, high value, significant crossovers… they will be OK.

    • 0 avatar
      28-Cars-Later

      SUVs are more or less gone, the last oil spike mostly dried up demand outside of the rich and those with deductible income (sales, tradesmen etc). Today what was the “SUV”, those seeking space and capability go Crew Cab and those seeking some space, height, and faux reassurance for their terrible lives go CUV. The industry listened and gave you 25% more fuel economy for the majority of that market who did not buy for capability.

      • 0 avatar
        sportyaccordy

        Ordinarily I find pedantry triggering but you are right; traditional BOF SUVs are dead, gone and replaced by crew cab pickups or crossovers. I’m pretty sure the JGC is unibody though no? In any case the only people who need to be scared are folks relying on pickups for profits, which is hardly just FCA.

        • 0 avatar
          28-Cars-Later

          Jeeps AFAIK have been unibody since the 70s. Current GC and XJ Cherokee def were.

          “In any case the only people who need to be scared are folks relying on pickups for profits, which is hardly just FCA.”

          Detroit, 1992, Detroit, 2000. Detroit, 2005. Detroit, 2008 to present.

        • 0 avatar
          krhodes1

          GM is sure selling a lot of Tahoes and Suburbans (and the Caddy versions) for something that is dead and gone. Excursions and Navigators for Ford. Plenty of Toyota Sequoias and 4Runners out there too. And the Landcruiser and Lexus equiv.. Volume may be much smaller than CUVs, but given they are fundamentally all $25K pickups, the margins must be epic. As Jack pointed out, there is $17K between his truck and the equivalent Suburban. How much more does it cost to make a Suburban? $500 on a bad day, maybe? Some extra sheet metal, a bit of glass, and another seat. And then another $1000 to turn one into an Escalade that goes for $15-20K more than the Suburban. Like printing money when the R&D is amortized over the pickups too. But you are right, if the demand for these things dries up, it’s going to be a problem.

          I do agree that CHEAPISH BoF SUVs (original Exploder, etc) are gone, other than the Wrangler. I can’t think of one.

          • 0 avatar
            ajla

            Sales on the Tahoe/Suburban/Yukon is about half what it was in the early 2000s. The Expedition, ‘Gator, and Sequoia have dropped by even larger percentages.

            BOF SUV volume in the last 10-17 years has fallen as hard as large sedans and a lot of the market has either disappeared (Trailblazer, Xterra) or gone CUV (Pathfider, Explorer, Durango, Sorento).

            The big difference (like you wrote) is that manufacturers have been able to move SUVs upmarket and enjoy fat margins to make up for the volume loss while they need to pile on incentives to sell sedans.

            Just as an aside, 4Runner volume is currently strong even by historical standards and the Wrangler is doing better than ever.

          • 0 avatar
            krhodes1

            It doesn’t matter if your volume is half if your profits are 3x or 4x. Good on them. Suburbans used to be relatively cheap. My family had about five of them when I was growing up. Took my license test in one in ’86.

            Wranglers are still cheap compared to the rest of that lot, and sell like gangbusters. Nice money spinner there too – though Jeep does seem to be the death of whoever owns it. 4Runners are fairly spendy now, aren’t they? I have no real idea what they cost other than assume a lot more than the Toyota pickup that is fundamentally underneath them.

    • 0 avatar
      dmoan

      @sporty

      I don’t think FCA revamped crossover lineup is doing that great; Cherokee are pretty much not selling any more and I doubt even refresh will save it. Renegade carry’s some of the highest incentives compared to other CUV and on par with Sedans like Sonata and even then they are barely selling.

      For example 30k MSRP Cherokee are selling for 20k how does FCA even make any money??? To make matters wirse New Compass is not selling to well compared to old Compass which people bought cause was dirt-cheap to lease. The New Compass is not getting great reviews either.

      • 0 avatar

        Renegade is the top seller in it’s class. They need to do something with the cherokee, according to allpar it will get a facelift in the next year. The new compass seems to be selling well so far considering it’s a lot more expensive then the one it replaced (which by the way sold boatloads despite being one of the worst reviewed vehicles on the road)

        • 0 avatar
          dmoan

          I believe Hrv overtook Renegade in sales last month and will likely take the sales crown in that segment this year. Yes old Compass was dirt cheap hence it sold inspite of reviews I don’t think with current pricing new Compass can hold out against the competition. We will see what happens.

          • 0 avatar
            danio3834

            FCA’s margins and profit are better than they’ve been since it was FCA, so the fact that the more expensive Compass doesn’t sell in the numbers (to rental fleets) like the old one did isn’t significant to the health of the company.

          • 0 avatar
            krhodes1

            You mean losing a little bit on each sale and making it up in volume doesn’t work?? Sure took Detroit long enough to figure that one out!

  • avatar
    NoID

    Isn’t this really an all-season tax?

  • avatar
    dal20402

    My wife, the Oracle of American Car Consumerism, speaks thus (and has gotten steadily more adamant on the subject over the past few years):

    “Sedans are done. Everybody really wants ‘SUVs.’ But it’s okay to have something that’s not a ‘SUV’ as long as it’s not a sedan.” And her category of “sedan” includes any coupe bigger or more notchbacky than a 911 Carrera.

    She would never tell me to do it, but I know she’d be very happy if I’d sell my LS460 and replace it with a Range Rover of equivalent age/mileage.

  • avatar
    nvinen

    Well that’s one good thing about the SUV/CUV craze for those of us who actually prefer sedans. Being able to buy the better handling vehicle at a lower price makes me happy.

  • avatar
    ajla

    Why did Infiniti make the Q70 5.6 cost as much as the QX80?

  • avatar
    stingray65

    Some of the SUV “tax” is driven by consumer preferences for jacked up station wagons, but some is also driven by CAFE. So if you really want/need your unaerodynamic, heavy, fuel swilling SUV, you will need to pay a jacked up price relative to the aerodynamic, lighter, and more fuel efficient sedan equivalent in order to make the CAFE penalties worthwhile to absorb.

    As for the future of GM, Ford, and FCA, if pickups and SUVs ever lose their popularity for any reason, they will be bankrupt within months since they earn 90+% of their profits from those types of vehicles. Nobody makes significant profits from small fuel efficient cars, except for some niche players like Mini, so for a variety of reasons all the major automakers better hope that oil prices stay low and bureaucrats (who don’t understand economics) don’t ban the entire industry’s main source of profits.

    • 0 avatar
      krhodes1

      Are any of the volume makers paying CAFE penalties? More like they have to price their efficient cars cheaply enough to get the volume to offset all those relatively gas swilling trucks, and/or invest in more expensive tech to make the trucks not swill quite as much gas. Do any of the luxo-SUVs do badly enough to pay the gas guzzler tax even? IIRC some are too heavy to even have to worry about it.

      And CAFE is rigged in favor of trucks anyway due to industry lobbying.

      • 0 avatar
        stingray65

        But if they lower the price and sales go up, then they run into CAFE problems unless they can also sell a lot more small/green cars to offset the hit. High price is used for rationing to avoid CAFE penalties.

        • 0 avatar
          krhodes1

          At this point, they would likely just pay the penalties. The profits on these things are so high the penalty would probably be worth it.

          Looking back, when the penalties were increased in 2016, JLR paid the most at $46m. None of the US makers were even on the list. Fiat paid $3M due to Ferrari and Maserati. I was a little surprised that Volvo was on the list, but I guess they are getting hurt by the success of the XC60/XC90. The new generation of those are MUCH more fuel efficient.

          Note that even for JLR, that penalty was less than $500 per vehicle sold in the US. A pittance. Fiat was about $200. Volvo was in-between at about $315 per car, still completely irrelevant when your vehicles cost $40K and up. The Feds were about to make the fines a lot tougher, but backed off. Increasing them is really unlikely to happen with the current administration. Even a stopped clock is right twice a day.

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