Investing.com -- Stellantis NV's recovery efforts are being tested by sluggish sales of the Jeep Cherokee hybrid, even as the company's Ram brand posts strong gains in the first quarter.

Jeep deliveries rose just 3% in the first quarter, while Ram brand sales jumped 20%, powered by the return of the popular Hemi V-8 engine. The modest Jeep performance comes despite a redesign of the top-selling Grand Cherokee SUV, a more affordable Grand Wagoneer and the launch of the compact Cherokee as a hybrid after a three-year absence.

Chief Executive Officer Antonio Filosa, who took the helm of Stellantis in June 2025, has focused on Jeep and Ram to revive the company's fortunes. He returned Stellantis to profitability in the first quarter and has reignited sales growth in the US, the company's most lucrative market.

The new hybrid Cherokee has returned to a compact SUV segment that is crowded and tailored to cost-conscious consumers. Stellantis sold about 4,500 Cherokees this year through April, gaining just under 1% share in the compact SUV segment, according to researcher Edmunds.com Inc. Dealers, who started receiving orders in December, say Cherokee sales haven't picked up much in May.

Elevated interest rates, tariffs and soaring gas prices have made the recovery more challenging. Filosa had to reassure investors that improvement in North America will continue after lower-than-expected margins sent the stock down last month. He is set to present his vision for the auto conglomerate's future at its US headquarters in Auburn Hills, Michigan, on Thursday.

Bob Broderdorf, Jeep's chief executive officer, says it's way too early to render judgment on the Cherokee's performance. For the month of May, he trimmed $60 from the lease payment offer on the Cherokee.

"It's our first hybrid: a 37-miles-per-gallon car, 500 miles on a tank. It's a very, very competitive Jeep," Broderdorf said. "The dealers will start experiencing that traffic, and they're very happy with the payment drop, too."

The company says production bottlenecks limited early volumes. Dealers who began the year with orders of the new Cherokee say current incentives aren't enough to compete with rivals like the Toyota RAV4 and Honda CR-V.

The average transaction price for a Jeep Cherokee in April was $43,481, versus an average of $36,900 for the compact SUV segment, according to Edmunds. The average transaction price for a competing RAV4 hybrid SUV was $36,104 while a hybrid Kia Sportage was $37,741.