Jeep dealer’s $50,000 sticker shock captures auto sales stress
Robert Loehr’s dealership is hanging in just fine, much like Fiat Chrysler Automobiles’ sales did last quarter. But just as investors doubt the U.S. car market can sustain near-record results for much longer, the Georgia retailer is apprehensive about a key issue: sticker shock.
“Prices are crazy on cars nowadays — all of them,” said Loehr, who sells Jeeps, Rams and other Fiat Chrysler models from a showroom northwest of Atlanta and has been in the business for 35 years. “They’re crazy to me, and I do it every single day, all day long.”
New Jeep Gladiators — the truck version of the rugged Wrangler model — can easily fetch $50,000 and are emblematic of a trend toward eye-popping prices carmakers are commanding for the pickups and sport utility vehicles making up an ever-greater share of their sales. Even as manufacturers and lenders increasingly stretch out auto loan terms to more than seven years and subsidize interest rates with incentives, average monthly payments keep climbing.
Affordability could become more of a risk if the mounting concern that the American economy is headed for recession ends up panning out.
The U.S. car market is likely at the end of a great run, said Brian Irwin, who leads the automotive and industrial practice for consulting firm Accenture.
“It’s a step down from where we thought we would be a few months ago,” Irwin said in a phone interview. “I expect to see stronger incentives coming out.”
While Jeep’s Gladiator is drawing customers into Loehr’s dealership, many are balking at $800-a-month payments they end up being quoted. He’s been able to convert much of that foot traffic into sales of lower-priced Jeep models, but still thinks automakers ought to do more banding together on engine development and parts-sharing to cut down costs and put a lid on prices.