Jeep Grand Cherokee L arriving in showrooms to expand brand's reach

A 2021 Jeep Grand Cherokee L scales a rocky hill at Stellantis' Chelsea Proving Grounds in Michigan.

Michael Wayland / CNBC

CHELSEA, Mich. – Jim Morrison smiles as he hears the piercing noise of rocks scraping the undercarriage of the Jeep he's driving.

"The most important thing for us at Jeep is to prove our capability," he says scaling a rock hill at a proving ground for Stellantis, Jeep's parent company. "That's what took us a bit longer than everybody else. It had to be a true Jeep first."

The vehicle Morrison, vice president of Jeep's North American operations, is driving is the 2021 Grand Cherokee L. It's a new model for the brand that's scheduled to arrive in showrooms next week as Jeep's first three-row vehicle in more than a decade.

By expanding the Grand Cherokee from a two-row to three-row SUV, Jeep is seeking to attract new buyers and retain current owners who previously had to leave the brand if they wanted a bigger vehicle. It's a key growth area for the brand amid an influx of new competitors such as the well-received Kia Telluride and Hyundai Palisade SUVs.

"It's going to really help us grow the top-end of the business , which is good to attract new customers," Morrison said, adding the Grand Cherokee already has a customer loyalty rate of nearly 50%."That's good for the profitability of the company."

Higher profits

Average pricing for the Grand Cherokee is always near the top of the midsize SUV segment against many vehicles with three rows, according to data from Cox Automotive.

Adding the Grand Cherokee L will push the SUV's average pricing and profits even higher, according to Matt Degen, an editor with the automotive data and insights company.

"They've needed this vehicle," he said. "Making the Grand Cherokee a three-row SUV is really a no brainer for the brand."

Jim Morrison, vice president of Jeep in North America, speaks June 11, 2021 during an event for the new Grand Cherokee L SUV in Detroit.

Michael Wayland / CNBC

Starting pricing for the Grand Cherokee L will be between about $37,000 and $66,000. The top-end pricing is about $9,000 over a comparable two-row model of the current vehicle.

The average price a consumer paid for a Grand Cherokee last month was $45,694, according to Cox. That's already about $2,600 higher than the average midsize SUV.

1 million sales?

Prior to the coronavirus pandemic shuttering assembly plants last year, Jeep's U.S. sales had topped 900,000 SUVs for two consecutive years.

Degen believes Jeep's domestic sales could top 1 million in the foreseeable future with the additions of the Grand Cherokee L as well as the larger Jeep Wagoneer and Grand Wagoneer SUVs that are scheduled to go on sale later this year.

Stellantis, formerly Fiat Chrysler, is significantly expanding Jeep production in the U.S. The automaker spent $1.6 billion to convert a former engine complex into a full assembly plant for the 2021 Grand Cherokee. It was the city's first new assembly plant in 30 years.

Workers at Stellantis' Detroit Assembly plant which produces the new 2021 Grand Cherokee L, a new three-row SUV.

Michael Wayland | CNBC

The automaker also is adding production of the Wagoneer models at a plant in suburban Detroit, bringing the number of plants producing Jeeps in the U.S. to six.

"Jeep is one of those crown jewels among automotive brands," Degen said. "The Jeep brand itself is really, really important to Stellantis overall, especially for American sales."

By the end of this year, Jeep is expected to expand its lineup from six vehicles to nine, including the Grand Cherokee L and Wagoneer vehicles. That excludes new plug-in hybrid models such as the current Wrangler 4xe and upcoming Grand Cherokee.

Grand Cherokee L

The 2021 Grand Cherokee L is recognizable as a Jeep but features a new exterior design with horizonal LED daytime running lights, a wider seven-slot grille and other design elements that debuted last year on the company's Grand Wagoneer SUV concept.

2021 Jeep Grand Cherokee L

Fiat Chrysler

The vehicle comes standard with a 3.6-liter V-6 engine with 290 horsepower and 257 lb.-ft. of torque. A 5.7-liter V-8 engine rated at 357 horsepower and 390 foot-pounds of torque also will be available.

The interior of the Grand Cherokee L features 8.4-inch or 10.1-inch touchscreen displays as well as a 10.25-inch frameless digital driver information screen behind the steering wheel. It is available in six-seat and seven-seat configurations.

The company also plans to offer hands-free driving technology in the vehicle in late-2021 on 2022 model-year vehicles.

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