Even with record sales, Jeep Wrangler inventories continue to grow

Jeep is also increasing Wrangler sales to fleet customers.

Jeep's all-new Wrangler SUV has been a smash success with buyers. Sales are up 25 percent so far this year, including an all-time monthly sales record for the nameplate in April. But despite those booming sales, inventories of the Wrangler are actually growing.

According to Automotive News, there are currently 85,979 Wranglers in dealership inventories. That's up more than 15,000 units since October. During that same time period supplies have swollen from a 109-day supply to 135 days worth of Wranglers in dealer stock.

The reason for the Wrangler's growing supply levels is pretty easy to explain -- increased production. Ahead of the launch of the new JK Wrangler, Jeep added a new assembly line at the Toledo plant where the iconic SUV is made. Jeep now has the capacity to produce more than 300,000 Wranglers per year. But whether that added supply is actually a good thing is a topic for debate.

That added capacity has allowed Jeep to sell more Wranglers to fleet customers. According to Automotive News data, nearly 12 percent of Wranglers sold through October went to fleet companies. In 2016, Jeep sold just 4 percent of Wranglers to fleet buyers.

Due to its popularity, that Wrangler has enjoyed some of the highest resale values in the industry over the last several years. However, some dealers claim residuals are actually falling on the Wrangler thanks to increased supply levels and Jeep's willingness to sell to fleet customers.

"The resale value has dropped, just in the last 60 days, by $2,500 a unit,” one Jeep dealer told Automotive News. "Somebody is not thinking this whole thing through.”

It remains to be seen if higher production levels and more fleet sales will actually be detrimental to the Wrangler brand long-term, but it's certainly something worth monitoring in the coming months.

Read more!