2014 Jeep Grand Cherokee DIESEL

[3930dave]

The price gap (USA, Canada), IMO, is not really technology driven. As you touched on Mike, present day GDI motors don't look that much different than a diesel, tech wise. (I do understand the higher stress levels in a diesel).

AND, I don't really buy the volume argument - the same players (Ford, Chrysler....) that market tons of diesels elsewhere in the world already have all the right components defined, tested, and the price driven down as much as possible.

Just Supply and Demand. The head of Marketing (and on up higher within these vehicle companies) is going to milk this price difference for everything they can.

Remember when these same players were selling huge gas powered sport utility trucks, faster than they could make 'em ? Profit margin was something north of $10k on each one.

Same business dance now, with diesels.

Personally, I'd like to see many choices for us here in the light diesel market. But, before we get to that stage, it is not going to be cheap getting into most light diesel offerings.

Rgds, D.

 

[mikehaugen]

I work with a guy that used to work at a GM plant. For one reason or another they released the manufacturing costs and he said a that the manufacturing cost of a suburban was around $8,000. This was like 10 years ago. Now I am not naive enough to think that manufacturing is the the only cost involved with pricing a vehicle... marketing, dealer profit, warranty fixes, taxes, maintenance, multi-million dollar salaries of CEO's and stock holder dividends are calculated in, but wow!

I also have seen the other end of it, one of the factory reps for some of the industrial machines we have told me flat out that they make little if any money on the sale of the machine. Their money comes from the parts mark-up, knowing that these machines have a life expectancy of 30-50 years and the fact that there isn't much of a market for aftermarket parts, it only makes sense.

 

[mikehaugen]

I work with a guy that used to work at a GM plant. For one reason or another they released the manufacturing costs and he said a that the manufacturing cost of a suburban was around $8,000. This was like 10 years ago. Now I am not naive enough to think that manufacturing is the the only cost involved with pricing a vehicle... marketing, dealer profit, warranty fixes, taxes, maintenance, multi-million dollar salaries of CEO's and stock holder dividends are calculated in, but wow!

I also have seen the other end of it, one of the factory reps for some of the industrial machines we have told me flat out that they make little if any money on the sale of the machine. Their money comes from the parts mark-up, knowing that these machines have a life expectancy of 30-50 years and the fact that there isn't much of a market for aftermarket parts, it only makes sense.

 

[mikehaugen]

Another consideration, is that it isn't only in vehicles that there is this difference. Small engines- generators, utv's, pumps, etc... have a huge spread between gas and diesel, though from what I have seen the difference in cost of a small engine is only about 2-3 times, sometimes less.

 

[Topkicker]

Not to hijack the thread, but what makes a diesel so expensive. They are quite similar to a gas engine as far as construction goes. Yes, I realize they have more steel because of thicker components, but really can they really cost 4-5 times as much to produce? I admittedly am not a diesel mechanic, but know my way around gas motors fairly well and can't see how diesels differ that much to justify the price difference, especially when you consider all of the stuff they are adding to gas motors now. Before I could see the mass-production side of it where they were making so many more gas engines it could really bring down the price, but that gap seems to be closing and the price gaps seems to be increasing. What am I missing?

edit: thinking about it, if you consider the fact that they are able to delete the cost of the gas motor when they use a diesel, that 4-5 times as much figure is actually probably lower than what it really is. They are quite possibly charging 6 or 7 times as much.

And yes, I am even taking in to consideration the fact that the trans is usually upgraded and probably the cooling system etc... I still don't see it. Enlighten me... those that know more about diesels than I.

There is alot more differences in the built process than you might think when building a vehicle equip with a diesel vs gas engine. For example: The GM trucks we build here at Ft.Wayne Assembly that get the D-Max option also gets you the Allison Tranny, heavier front suspension components (due to the extra weight), heavier and larger diameter exhaust assembly, DEF tank and fluid, and a different hood. I'm not saying that makes up for the total price difference between the two. Just saying there is alot more that meets the eye than just the engine and tranny being different.

 

[3930dave]

Front end, or back end, I don't begrudge a manufacturer a decent profit margin when they provide a quality product. I know some of what it takes to keep future research rolling along..... not cheap.

And.... I don't really expect a car manufacturer (or any other business) to play the supply/demand curve any different.

What got old for me a long time ago, is our government (Canada being further down this "road" than the USA) continually driving the overall costs of vehicle ownership and operation up. AKA tax grab.

If I lived in Luxembourg, I wouldn't care as I could walk across the entire country in less than a day. Us peasants here are stuck with little or no useable public transit, and stupidly long commutes around most major cities.

My irritation with the govt's tax policies with regard to diesels comes from the stress involved with high transportation costs. With the Canadian economy declining (I don't care what the pols and economists say), there is a real need here for more efficient long distance personal transportation. AKA diesels.

Perhaps, our economy needs to flame-out totally for the pols to get the message ?

Rgds, D.

 

[mojoinco]

I think there are a few not so obvious details here:
Fiat sells vehicles all over the world (a plus for Chrysler). They want a World Vehicle. And they have other brands that are being assembled here that are based on the Grand Cherokee.
That means making them as much alike as possible. And for the most of the rest of the world, vehicles in this class need a diesel option. Often this is driven by local tax policies: engine displacement is usually part of the tax equation. Especially in the EU. Also, the US has tougher diesel emissions requirements than the EU. Probably more than anywhere else (Japan?).

And last, US politics. Nobama got new mileage requirements approved a couple of years ago. I suspect this plays a part in the diesel debate on high profit margin vehicles.

IIRC, the Liberty diesel was only sold for a few months, and it used the Italian engine, not a Benz. Bummer if you have one, as I suspect that Chrysler is off the hook to support it under the Federal liability laws (can't recall the agency, but a manufacturer has to support a product only so many years after it's made, something like 7 years; Fair Trade Commission?). And support is probably met by selling you an entire engine.

 

[Viperdave]

pricing side note:

in Europe a 2013 CRD limited 4wd is 38,595
An SRT8 jeep is 59595

for 2013 in the USA
an srt8 is 60,295 (within 1000)
a pentastar limited 4wd is 39595.

So based on this information using the srt8 as a baseline for the comparison, we should expect a ~1.2% increase in cost over UK so the price would be 39,058... less than a pentastar... ok ok, i am bored at work... and yes it is nice to dream that it wont be a 4K option.

 

[Diamondpilot]

pricing side note:

in Europe a 2013 CRD limited 4wd is 38,595
An SRT8 jeep is 59595

for 2013 in the USA
an srt8 is 60,295 (within 1000)
a pentastar limited 4wd is 39595.

So based on this information using the srt8 as a baseline for the comparison, we should expect a ~1.2% increase in cost over UK so the price would be 39,058... less than a pentastar... ok ok, i am bored at work... and yes it is nice to dream that it wont be a 4K option.

Good luck on the diesel being cheaper than the base V6. My guess is you will not be able to get one for less than $45,000 and the ones on the dealers lots will be $50,000. Primary reason is there will need to be a bunch of add ons to meet our emissions requiements.

If they can do better than that they will be flying off the showroom floor.

Chris

 

[Dmace]

Good luck on the diesel being cheaper than the base V6. My guess is you will not be able to get one for less than $45,000 and the ones on the dealers lots will be $50,000. Primary reason is there will need to be a bunch of add ons to meet our emissions requiements.

If they can do better than that they will be flying off the showroom floor.

Chris

The new diesel will use urea after-treatment and a diesel particulate filter to meet emissions standards. Hardly a "bunch of add-ons" or anything new. I still stand by my theory that they will price it the same or close to the HEMI like they have in the past.