CHIP HELL.

By Peter M. DeLorenzo

Detroit. Good morning (or afternoon, or evening, or whenever you might read this). We were going to re-run a column this week since I normally do my writing on Sunday and Monday – just to give myself a bit of a Labor Day break – but since we’ve already updated the rest of the website, there’s no reason for me to step away from my keyboard.

Besides, the swirling maelstrom that defines the current state of the automobile business refuses to slow, and in fact, it is picking up speed. Not to belabor the obvious, but the effects of the chip shortage, as I mentioned last week, are actually accelerating. For those who live in and around these parts – as well as in automobile centers around the world – this situation is wreaking havoc on product programs and cadence, dealership infrastructure, and, most important, profits. 

I recently took an extended tour and visited dealerships around here, and the reality is shockingly grim. The inventories at these dealerships are nonexistent, and any cars or trucks they do have are either already spoken for or are marked up beyond all recognition. (There are persistent rumors of new, full-size Broncos being marked up $50,000, and although I did not see it for myself, I have heard that it is happening many more times than once. The “first-on-the-block” types never learn, apparently.) 

Yes, dealerships are getting very creative – or trying to anyway – by taking orders on new vehicles and assembling low-mile used cars to sell, but who’s kidding whom here? Livelihoods in this industry are at stake, and with this shortage situation threatening to extend all the way to the 2023 model year, the very foundations of this business may be altered permanently. 

Think about this for a moment: It has been 75 years (basically since WWII) that consumers in this country didn’t have enough new vehicles available to purchase. We’ve grown accustomed to the constant “sell-a-thons” (thanks, Toyota), holiday sales, end-of-year blowouts, and a kaleidoscope of other sales and promotional gimmicks designed to move the metal, basically since we all can remember. This is simply no longer the case. And the long-term implications? You can count on higher prices, for one, and many fewer “deals,” for another. This industry has salivated at times over the idea of the “no-dicker sticker.” Don’t be surprised if that concept becomes a permanent result from the shortage.

Let’s see, what else is percolating this week? Still basking in the glow of Ram Truck’s big win in the latest J.D. Power Initial Quality Study, Stellantis operatives are high-fiving as you read this. I don’t put much stock in Power’s “IQ” study, but there’s no denying that Stellantis has made huge strides in delivering quality in the last 24 months, especially after having been near the bottom for many years. I will give them this one. Yes, it is a big, positive deal.

But there are storm clouds gathering on the not-so-distant horizon for Stellantis on another front. And this has to do with the launch of the new Jeep Grand Cherokee L. (In case you were wondering, there’s no “resting on your laurels” in this business. There’s always a burgeoning Shit Show brewing somewhere. -WG.) You’re familiar with this new “big” Jeep, right? It’s the one with the vaunted “three-row” seating, “A Legacy Extended,” as Jeep marketers say. Three-row seating has become the Holy Grail for SUVs in this business (even though minivans do it easily 100 percent better), because manufacturers have come to believe that without this feature they are losing out to the competition. 

In some circles, that may be true, even if owners use the third row so infrequently that the extra ca$h wasn’t even remotely worth it. Be that as it may, Stellantis operatives talked themselves into the “need” for a big Jeep.

How is that working out for them? Well, not so great. For one thing, the new Jeep Cherokee L has absolutely zero presence on the road in terms of design. It’s ungainly and brick-like, and its Jeep styling cues come across as being forced, almost strange. The one Jeep dealer I visited was swimming in Cherokee L Jeeps, probably the result of a couple of truckloads being emptied. But the one thing that stood out about them for me is that they didn’t belong being parked next to “real” Jeeps. Whereas the Gladiator made sense, design-wise, the Cherokee L comes off as a “wannabe” Jeep that simply doesn’t belong anywhere near the rest of the brand. Don’t be surprised if the Cherokee L doesn’t take with Jeep customers. And don’t be surprised when shoppers new to the Jeep brand simply go elsewhere. To paraphrase, Dr. Evil: It’s not quite Jeep enough. It’s true, it’s quasi-Jeep; it’s semi-Jeep; it’s the margarine of Jeep; it’s the Diet Coke of Jeep - just one calorie, not Jeep enough.

In other news, the degradation of Mercedes-Benz Design has been an ongoing train wreck for several years now. Except for one spectacular concept presented four years ago – the Mercedes-Maybach 6 Cabriolet – Mercedes designers have been on a downward spiral that simply boggles the mind. 

(Mercedes-Benz)

The Mercedes-Maybach 6 Cabriolet.

In fact, no design group has done less with more than Mercedes-Benz Design. The company’s glittering legacy is being pathetically underserved. The latest evidence? Check out our “On The Table” column this week for a look at the latest EVs from M-B designers. The work is simply appalling, the G-Class concept in particular. Ugh. Memo to Mercedes-Benz honchos: Mediocrity isn’t bliss. If you don’t get a handle on what’s happening and reverse what appears to be an inexorable slide, then you will get what you deserve. (Then again, BMW’s big news from Frankfurt is two electric bikes and a concept for 2040 that left us chilly. As in, WTF? You can see them in “On The Table” as well. -WG.)

And finally, as I’ve often said, it’s the dedication of the True Believers that makes the difference between success and abject failure in this business. Without them, and their willingness to do things the right way every day, these manufacturers would simply fade away to oblivion. Please go to my “Fumes” column this week and read about some exceptional True Believers from this industry’s past. Their incredible legacy lives on.

And that’s the High-Octane Truth for this week.