With the introduction of the first Grand Cherokee, Jeep defined and created the luxury sport utility vehicle (SUV) market, but in spite of this grand tradition the model is currently experiencing some difficulties. Jeep not only defined what an SUV was, it was the SUV market in the USA with the inception of the Cherokee and later on Grand Cherokee. This is no longer the case. The growing list of strong competition has intensified, and along with high fuel prices, this has lead to some serious challenges to Chrysler in spite of Jeep’s combination of legendary 4x4 capabilities, on and off-road refinements, and technological innovations. The Jeep Grand Cherokee was one of the pioneering SUVs that ushered in the modern SUV market in the early 1990s. When it debuted, the Grand Cherokee represented a bigger and more refined version of Jeep's smaller but popular Cherokee. The company's designers wanted the Grand Cherokee it to be maneuverable enough for city driving, roomy enough for the whole family, stylish enough to take out on the town and rugged enough to reach those remote camping areas. The Grand Cherokee certainly met all of these requirements and, we feel that Jeep continues with this tradition in its current Grand Cherokee version. The 2005/2006 version of the Grand Cherokee, which is the model’s 3rd generation, is one of the best SUVs made, and as one critic put it “arguably the most desirable”. With some of the outstanding available features of full-time four-wheel drive, independent front suspension, rack and pinion steering, a five-speed transmission, and an available 5.7-Liter HEMI V-8 with MDS, which deactivates up to 8 cylinders when not needed for better gas mileage performance, the Grand Cherokee is featured packed. Safety features include Electronic Stability Program, SmartBeam ™ headlamps that automatically and quickly adjust high-beam brightness and intensity, All-Speed Traction Control System, and advanced multi-stage air bags with an Occupant Classification System. The look and feel of the body was also updated to give it an edgy angular look, which looks new and contemporary while retaining that Grand Cherokee style with the famous 7-slot Jeep grille. Chrysler also gave the Grand Cherokee an updated suspension system that delivers better corning turning performance and a tighter turning radius. In spite of these top-of-the-line features, Grand Cherokee sales in the USA for 2006 (ending December 31, 2006) were 139,148 units, which were down from 213,584 in 2005. This represents a decline of 35%. Jeep’s smaller SUV, the Liberty, also saw its numbers drop dramatically in 2006 with unit sales of 133,557 versus unit sales of 166,883 for 2005, a 20% decline. While it doesn’t necessarily make Chrysler feel any better, they were not alone in decreased sales in the SUV segment. Other USA car manufacturers also experienced declines. Ford experienced a 25% drop in its SUV sales for the USA, while GM’s truck sales were down 9.6% (2,499,269 for 2006 versus 2,765,809) (detailed performance reports for GM’s SUVs was not available). The decline in SUV sales, especially mid-range models, was affected by the dramatic price increases in gasoline during 2006. This along with luxury SUV models by BMW, Lexus, Mercedes, and Porshe, and mid-priced SUVs by Mitsubishi, Toyota and others experiencing a surge in popularity is creating a sizable challenge to Chrysler. With its outstanding features, Jeep tradition, and the Daimler-Chrysler technology behind it, we look for the Grand Cherokee to make a strong return in the future.