Jeep sales slowdown "unrelated" to $30 million scandal

Jeep says it will reverse the sales slide next year, may source cars from India.

The boss of Jeep Australia says the company's sudden sales slide has not been caused by media coverage of the $30 million scandal into the alleged misuse of corporate funds by former bosses.

The jointly-owned Jeep, Chrysler, Fiat and Alfa Romeo brands are down by between 9 per cent and 49 per cent year-to-date, the biggest falls among mainstream marques -- despite the Australian new-car market being on track to post all-time high in 2015.

After four years of record sales, the Jeep group's downturn took hold about the same time as the US car giant took Federal Court action against two former Australian bosses, Clyde Campbell and his successor Veronica Johns.

But Jeep Australia boss Pat Dougherty says currency pressure -- not the scandal involving free loan cars to dozens of celebrities and millions of dollars in allegedly "uncommercial deals" -- is the reason behind the sudden sales decline.

The global economic situation has changed

"I don't believe the two are related," said Dougherty. "I think that the buying public here, I give them credit for being very intelligent, everybody wants companies and individuals to do the right thing, so I don't think the court case is causing a loss in sales."

The value of the Australian dollar against the US dollar has weakened by more than 30 per cent since Jeep posted its local sales records.

"The global economic situation has changed," said Dougherty.

This has prompted Jeep to consider building new factories in India to supply cars to Australia in the future. Dougherty is due to visit the country next month.

"We're in the process of developing a business case for vehicles to be built in the region," said Dougherty.

Since this year's price rises, Jeep dealers say the brand is massively overstocked in Australia due to the sales slowdown -- but the company insists that is not the case.

"What we're trying to do is balance (and) run a profitable business and make sure we do the right thing for our dealers and do the right thing for our company at the same time," said Dougherty.

"We reduced our stock intentionally because we want to be quicker to market."

I think you will see us start to grow in the second half of 2016

Dougherty said Jeep sales will continue to slide until this time next year, when more new models arrive following this week's release of the Renegade city-sized SUV.

"If you look at our product plan... it starts to kick in with Renegade and then we start to get new product in the first half of next year as well, I think you will see us start to grow in the second half of 2016," said Dougherty.

FCA Australia spokeswoman Lucy McLellan said Chrysler sales were down because the company had halved its model range -- from two to one -- with the axing of the Voyager people-mover, and Fiat and Alfa Romeo line-ups were also rationed.

Meanwhile, heavy duty US pick-ups made by Ram may soon be sold alongside local Dodge dealerships.

Independent automotive distributor Ateco has partnered with Walkinshaw Automotive Group -- the parent company of Holden Special Vehicles -- to commence factory-quality right-hand-drive conversions by the end of this year.

"We spoke with Ateco and said if they have a proposal (to sell Ram trucks in Dodge dealerships) they want to talk to us about, let's talk about it, so we're working with them on it," said Dougherty.