Jeep India has officially axed the 1.4-litre 4-cylinder turbo petrol engine used in Jeep Compass. In the recent wake of dealing with stringent emission norms, automakers face a major upheaval with implementing the Real Driving Emissions (RDE) norms, also known as Phase II of the BS6 emissions norms. Though STRINGENT might sound cliche to you. But it is what it is. Not just Jeep India, various other auto majors, including Honda, Hyundai, Skoda and even Maruti Suzuki, have discontinued their engines and halted the production of some of their popular models to comply with the new regulations. The decision implies different business cases and benefits for other manufacturers as they have already diverted their strategies to better fit the upcoming market. In comparison, Jeep India's move to discontinue its petrol engine is absurd, as the life of a diesel engine is unreasonable and may even go extinct in the coming years. Moreover, Jeep India needs help to meet its ambitious sales number. Compass is their bread and butter, their main product that sells well. Despite various flaws and shortcomings with its petrol engine, it still managed to contribute around 50 per cent of Compass's overall sales. And now, with the petrol variant being discontinued, leaves Jeep India vulnerable in the Indian market with a diesel-only option.
First, let's start with addressing the latter question; Jeep India sold 558 units last month, of which 266 were Compass and 292 were Meridian. The sales have been on a declining trajectory since the start of the year. Moreover, Meridian was launched with high anticipation. However, it struggles to meet the expectations by a large margin. Despite being expensive, Meridian's primary rival - Toyota Fortuner- marked its total sales at 2578 units, around 9X more than Meridian. Well, these numbers might give you a perspective of the Company's profit value. On top of that, discontinuing the petrol variant might further drive consequences. However, Jeep India is optimistic about the market and says - "We will continue to invest and develop its efficient state-of-the-art 2.0 L MultiJet Turbo Diesel powertrains offering superior torque, lower emissions and impressive fuel efficiency. Jeep India is committed to the market and has significant product plans for the future. We will continue to explore all possible engine and fuel options in line with the evolving market preferences to offer what is most relevant to our consumers".
When Jeep says it will explore other fuel options, it hints at using technology from parent group Stellantis to fast-track its electrification process so that the Compass, in its electric avatar, might make it to India by 2026. But until then, the future seems half-baked and cash-burning.
Here's what went wrong. In 2020, FCA announced a 1.3-litre GSE turbocharged four-cylinder engine petrol engine for the Compass. This 1.3-l engine completely replaced 1.4-litre in the global market. It was a matter of time before we would have expected a facelift Compass with a new emissions-complaint 1.3-litre engine. However, as the 1.4-l was compatible with BS6 Phase 1 norm, Jeep India did not bother to get it replaced. Well, that goes to say that Jeep India did not foresee the depth of the Indian market. The primary justification for the same could be the viable business case, as the export volumes and domestic sales were far from ideal.
Until 2018, Right-hand-drive Jeep Compass was exclusively (one of the only four locations) built in FCA's Ranjangaon plant in Maharashtra. Lessening the burden on India's plant and fulfilling the demands of RHD cars in Europe, FCA has decided to shift the production to the Melfi plant in Italy. Better Jeep would have utilised the plant to manufacture Renegade, which shares its platform with Compass and would have been a great entry-level proposition to rival Hyundai Creta. We just wished, but the brand never showed up with the plan to launch it in India. Now, FCA is left with no business case with a 1.3-l petrol engine for export as well as a domestic market. And now, with the 1.4-l petrol engine out of phase, it leaves the brand more vulnerable to economic downfall with a diesel-only option.