Stellantis, the world’s fourth-largest automaker, has pulled the plug on the next-gen Jeep Compass which was due for launch in the Indian market in 2026. Sources say the project, codenamed J4U, which was under development for over a year, has failed to meet the commercial viability for the Indian market which forced Stellantis to cancel the project.
New Jeep Compass: why it’s not coming to India
The development of J4U would have entailed an additional investment of over $400-500 million (Rs 3344 crore to 4180 crore) as it involved developing an all-new product on the all-new STLA-M platform. The makers of Jeep and Citroen brands had explored the possibility of not only developing the new gen Compass on that platform but also producing similar-sized Peugeot SUVs for the Malaysian market, to be exported from India to ensure adequate scale to make the project viable. However, falling volumes of Compass in India and limited potential for Peugeot SUVs in Malaysia meant that the minimum volumes required could not be guaranteed.
The biggest stumbling block was the cost structure of the STLA-M platform which has been designed to support a wide range of vehicle types, including sedans, crossovers, and SUVs The STLA-M platform also incorporates advanced connectivity features, up-to-date infotainment systems and ADAS. with both electric and ICE options.
The STLA-M also had the flexibility of being compatible with electric powertrains and IC engines. This meant an all-electric Compass and the standard ICE versions could simultaneously launched. However, all this flexibility has come at a cost. “To incorporate multiple powertrains and body styles has made the STLA-M very expensive” said a Stellantis source. In fact, suppliers who were at an advanced stage of the J4U project said that the development overshot cost targets by 1.7 times which made the project a non-starter, especially in the eyes of Stellantis’ global CEO, Carlos Tavares who is known for his brutal focus on cost control.
When contacted, a Stellantis India spokesperson said, “Stellantis remains committed to investing in the India market as it is the only country to locally produce and assemble four Jeep nameplates outside of the United States. There are no changes to the production of Jeep vehicles in India, and there are no announcements to be made now.”
Current-gen Compass to continue beyond 2026
Sources say the Jeep will continue manufacturing the current Compass in India beyond 2026 and will try to extend its lifecycle with occasional cosmetic upgrades. The current-gen Compass was Jeep India’s bread-and-butter model, averaging over 1500-2000 units in 2017-2018, its peak period of sales. However, Jeep has struggled to sustain sales and over the last six months, monthly sales have hovered around a dismal 270-unit mark.
This model has been on sale for nearly seven years already, having launched back in July 2017, and facelifted in 2021. While we had reported on the possibility of Jeep bringing back a petrol engine option for the Compass after it was discontinued in May 2023, that plan is also likely to have been dropped due to the low volumes, which does not justify the investment and homologation costs of a new engine. Hence, the current Compass will have to soldier on as a diesel-only offering.