Tariffs Would Slam the Jeep Renegade, Force FCA to Weigh Options

Steph Willems
by Steph Willems
tariffs would slam the jeep renegade force fca to weigh options

Jeeps smallest U.S. offering stands to be hit hard by proposed import tariffs, according to calculations from an investment advisory firm, and the volume of vehicles Fiat Chrysler brings in from outside U.S. borders would see the automaker take it on the chin.

With the Trump administration mulling a range of tariffs, the firm tabulated just how much the import duties could cost FCA. If the tariffs come to pass, expect to see fewer Jeep Renegades on your local dealer lot.

Data from Evercore ISI, published by Automotive News, reveals that a 25-percent tariff on vehicles built outside U.S. borders would cut into FCA’s profits to the tune of $866 million a year. That’s the worst-case scenario.

If instead Trump goes ahead just with his 20-percent tariff on European Union imports, FCA’s loss isn’t as great, but it’s still hefty. $613 million. The bulk of the loss stems from a single model FCA trucks in from Italy — a subcompact, Fiat-based crossover that made up roughly two-thirds of the 158,553 vehicles FCA imported from non-NAFTA countries in 2017: the Jeep Renegade. Last year, Americans bought 103,434 Renegades — a slight decrease from 2016’s volume.

In total, FCA imported 136,827 vehicles from EU nations last year. The entirety of vehicles sold under the Alfa Romeo, Maserati, and Fiat banner also originate outside the U.S., though FCA surely isn’t concerned all that much by the latter brand. Models not hailing from NAFTA countries and the EU include the Fiat 500L, Ram Promaster City, and Fiat 124 Spider.

While a steep tariff would raise the Renegade’s sticker price, FCA has a number of routes it can take to lessen the impact.

“FCA will be examining a variety of options,” said George Galliers, an Evercore analyst. “These could include a push to upsell consumers into NAFTA-sourced vehicles, including the Compass and Cherokee models; keeping the European-sourced Renegade in the market but focusing on higher-specification versions; and looking to source Renegades for the U.S. market from Brazil, where it is also produced, or potentially localizing it in the U.S.”

[Image: Fiat Chrysler Automobiles]

Join the conversation
2 of 35 comments
  • R Henry R Henry on Jun 28, 2018

    Indeed, any sort of change in the business/economic climate illicits howls of protest. The status quo has great inertia. Thing is, business conditions are always in a state of change. Well managed firms adjust their operations to take advantage of new opportunities and to reduce risk from changing economic conditions. If the stated objective of a tariff is increased domestic employment and production, of course foreign produced product is likely to become more expensive...that is how tariffs work.

  • Kjh8 Kjh8 on Aug 22, 2018

    Can we seriously get back on topic? None of us are in office anyways to make any decisions so we have to deal with what we get. We can't control President Trump and whether or not anyone likes him as a president, he's still our president that can do whatever he wants -- whether we like it or not. What's ranting on about his decisions going to do? Instead let's look into what the reality might be. Honestly though, reading these comments makes me wonder if anyone here is a mature adult. It's downright ridiculous and embarrassing, and also humiliating. Yeah, you may rebuttal my post about how ridiculous this rant even might be, but come on though, I read these comments with the notion of someone giving insight as to how the prices would effect this Jeep model -- like what the original post is all about -- but instead I find trivial commentary and verbal junk non-relating to what the original author posted. Have some sense. I'm surprised some of you passed English in school. What really is a considerable question is whether or not buying a vehicle like this one, the Jeep Renegade, before his new tarrifs, would effect the price of repairs after his tarrifs got passed. So I'm looking into getting a Jeep -- used, pre-owned or even certified at a Jeep dealership -- before his tarrifs get passed. Now, if I buy a model like the Renegade (for example), and the tarrifs did get passed, would I then have to pay more for repairs since the parts are from out of the U.S. (to my understanding, though I could be wrong) -- is my curiosity? And also, when is the best time to get a vehicle and should it be from either a FORD, GMC, or FCA since they are American brands? If anyone who can answer logically without cynicism and hold a mature conversation, I would appreciate it. And please, just stick to the questions without any immaturity.

  • TheEndlessEnigma That's right GM, just keep adding to that list of reasons why I will never buy your products. This, I think, becomes reason number 69, right after OnStar-Cannot-Be-Disabled-And-It-Comes-Standard-Whether-Or-Not-You-Want-It and Screw-You-American-Car-Buyer-We-Only-Make-Trucks-And-SUVs.
  • 3SpeedAutomatic Does this not sound and feel like the dawn of ICE automobiles in the early 20th century, but at double or triple speed speed!!There were a bunch of independent car markers by the late 1910’s. By the mid 20’s, we were dropping down to 10 or 15 producers as Henry was slashing the price of the Model T. The Great Depression hit, and we are down to the big three and several independents. For EVs, Tesla bolted out of the gate, the small three are in a mad dash to keep up. Europe was caught flat footed due to the VW scandal. Lucid, Lordstown, & Rivian are scrambling to up production to generate cash. Now the EV leader has taken a page from the Model T and is slashing prices putting the rest of the EV market in a tail spin. Deja vu……
  • Michael Eck With those mods, I wonder if it's tuned...
  • Mike-NB2 I'm not a Jeep guy, but I really, really like the 1978 Jeep Cherokee 4xe concept.
  • William I'm a big fan of 70s Lincolns. I really liked the 1980s Mark Vl. I thought it was very classy, and I never thought of it as a restyled Town Car. I did own a 1990 LSC, it was black over black leather interior. I loved the LSC as soon as they were introduced. I loved the sound of the duel exhaust, I thought it fit the car perfectly. I never had any problems with it. The 5.0 is a great engine, and never had any issues with the air suspension system. It had the the analog dash and I made good use of the message center. I highly recommend this Mark. The black paint and interior fit the car and me perfectly.