- Jeep has reportedly stopped building its new 2026 Cherokee compact SUV after a supplier stopped delivering parts.
- The matter now involves lawsuits in two countries.
A legal dispute between Jeep and a parts supplier has halted production of the all-new 2026 Jeep Cherokee, according to the Wall Street Journal. The Toluca, Mexico, factory that builds the model has been idle since March 14. Dealers have a relatively thin supply of the car in stock.
Dispute Over Payment
- Jeep says the supplier is overcharging it and has stopped delivering parts. The supplier has not commented.
In a Michigan lawsuit, Jeep alleges that ZF Chassis Modules Inc has stopped shipping some parts to the factory. Stellantis has asked a Mexican court to force the supplier to resume regular operations. That court has not yet ruled on the matter.
According to industry publication Automotive News, Jeep accuses the company of “extorting the automaker for a $70 million lump sum cash payment and price increases.” The supplier is reportedly withholding suspension modules needed to build the Cherokee and threatening to halt deliveries to a second factory in Canada.
A Michigan judge issued a temporary restraining order on March 25 requiring the supplier to resume shipments. That order expires in two weeks. Automotive News reports that a hearing regarding this matter is scheduled for April 6.
AN reported that the issue between ZF and Stellantis began last December, when “Stellantis alleged that it paid the supplier more than $26 million and granted
‘substantial price increases’ to resolve a stop-ship situation.” ZF Chassis Modules has not responded to the lawsuit, according to AN, but other suppliers have chimed in, saying that “Stellantis supply deals are not ‘requirement contracts,’ and therefore the supplier is not legally obligated to ship parts.”
Car In Short Supply
- Jeep dealers have less than a month’s worth of Cherokees to sell — well below industry norms.
While disputes between car suppliers and automakers aren’t new, it’s rare for a parts company to refuse to ship materials. This disrupts the manufacturing rhythm and upends production schedules.
The Cherokee is new, returning to the market after a 3-year absence. Dealers had just a 25-day supply of the cars at the end of February, the most recent month for which we have data. Most automakers aim for at least 60.
We’ve reached out to Jeep for comment and will update this story if we hear back.
