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Subaru's fortunes sinking - can they turn it around?

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  • nippononlynippononly SF Bay AreaPosts: 12,693
    And what's more, they were the ONLY ones to do it! Subaru was up in sales for CY 2008, up by 0.3% in a market that ended up down by 18.6%. In the end even Daimler couldn't stay in positive territory, down 1.5% for the year. And of course, the Japanese Big 3 were down by 7.9%, 10.9%, and 15.4% (in alphabetical order). So nobody besides Subaru had a better year in 2008 than they did in 2007.

    And I guess that accomplishment can be placed squarely on the shoulders of one model: the redesigned Forester. Which I personally believe took off because the ad campaign for it was much better than other Subaru ads in years past.

    http://www.autonews.com/apps/pbcs.dll/article?AID=/20090105/ANA05/901050281/1078-
    (registration link)

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • dino001dino001 Tampa, FLPosts: 3,538
    Yeah - "love" campaign was bullseye, no question. One featuring this guy talking about replacing his old Forester was fantastic. But I think it was the product, not the ads that made it. GM has had multiple really good commercials, so what.

    Did you guys also notice multiple copycats springing up, or is it just me? "Camry a camry" comes in mind, there was one more I can't remember.

    2012 BMW 328i wagon, manual and sports package. No. sold in the US: 1. Probably.

  • ateixeiraateixeira Posts: 72,587
    Tacoma clone? Hmm, may give dealers more volume.

    I dunno, though, pickup sales are droppoing, it may be the wrong time to enter that segment.
  • ateixeiraateixeira Posts: 72,587
    I predicted the Forester was going to be a hit, but even I, the optimist, didn't think it would be enough to overcome a lousy market. Kudos.

    The ad dino brought up really hit home for me - I had a 1998 Forester like the one featured in the ad and bought a 2009 also featured in the ad. My 98 was even the same COLOR!
  • nippononlynippononly SF Bay AreaPosts: 12,693
    I am a little puzzled - it seems that after a year in which Subaru sigificantly out-performed the market and reported a net GAIN in sales, it still came out last Friday and forecast that it will report an operating loss for the year??

    Fuji Heavy Industries Ltd., the maker of Subaru-brand cars, forecast its first loss in 15 years, as the global recession decimates demand for new cars and a strong yen erodes overseas sales.

    Fuji Heavy forecasts a 19 billion yen ($211 million) loss in the year ending March 31, it said in a statement today, scrapping a previous forecast of 10 billion yen in net income. The company will post a 9 billion yen operating loss, compared with a previous forecast of a 23 billion yen operating profit.

    Separately, the company lowered its global sales target for this fiscal year by 60,900 vehicles to 554,800, it said in a statement. Fuji Heavy based its earnings forecast on an exchange rate of 101 yen to the dollar, compared with an earlier assumption of 103 yen.

    President Ikuo Mori may boost overseas production and procurement because of the strong yen, he told reporters today in Tokyo. He is also cutting board members’ pay by 10 percent from this month and they will not receive bonuses.


    Yikes, I would hate to see what the annual results would have been if they were down 18% in the U.S. as the rest of the market was....

    ...and on a sidenote, it would seem they need to start building Foresters and Imprezas in the U.S. like they do the Legacys and Outbacks, so as to be more protected from the yen exchange rate than they are currently.

    http://www.bloomberg.com/apps/news?pid=20601101&sid=a0JRRNwbIm5s&refer=japan

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • boaz47boaz47 Posts: 2,750
    I think many were simply wishing too hard that Subaru would dodge the same bullit that has hit the rest of the industry. As I have said before subaru owners are some of the most loyal owners I have ever talked to. But when you mentioned Subaru was dropping out of WRC I believe the idea that they simply couldn't afford to stay in the series and they couldn't afford to make a new car should have been an indicator of what was happening.

    http://www.topgear.com/uk/car-news/subaru-wrc-2008-12-16

    Yes racing will suffer in general as well as ALMS and F-1 take a hit. But Subaru has not dodged the bullit. anymore than anyone else. They are smaller so a small wound may hurt even more. The first half of 2009 will tell us a lot but I don't think the exchange rate will get any better. Subaru needs to hold on to a niche that may or may not hold up in a world looking for entry level new cars at entry level prices.
  • scwmcanscwmcan Niagara, CanadaPosts: 394
    From reading the article it seems that the parent company is reporting a loss, not necessarily Subaru itself. Fuji Heavy is involved in a lot more that just making Subarus, it could be that their loss is unrelated to the car side (they don't really say either way, though at least a third of the loss seems to be from the bankruptcy of the light plane builder that owes them money. They are of course projecting a drop in their sales for the next year, and want to reduce the impact the value of the yen might have. Also just because they had great sales in the US doesn't mean their sales in the rest of the world were as good.
  • kyfdxkyfdx Posts: 30,485
    Their fiscal year ends on March 31st... So, maybe they eked out a flat calendar year, but sales really fell off a cliff starting in October.. So, half of their fiscal year will fall from October on....

    In other words, when all the figures come in, I think you'll find they will be in a similar situation to all the others... They just had a big hit (Forester) early in the calendar year to pad their numbers.... The sales before April of '08 were in the previous fiscal year.

    regards,
    kyfdx

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  • dtownfbdtownfb Posts: 2,915
    Don't forget Subaru had a goal of 200k vehicles last year. They surpassed 2007 sales numbers but did not reach their goal. Also you have to consider what incentives they needed to move those vehicles in this market. When you are selling less than 200k units, incentives and rebates have a larger toll on your profits.
  • ateixeiraateixeira Posts: 72,587
    Forester led their sales and had no incentives, though.

    Also, January sales are out and Subaru was up 8%.

    The 2009 Forester came out in late March, early April, so I'll be curious to see sales in April, when we start to compare the same new models.
  • nippononlynippononly SF Bay AreaPosts: 12,693
    Shifty just started a separate discussion on this, and I wasn't aware of what you mentioned here - that the Forester being sold in January 2008 was still the old model? I couldn't remember when it came out. So is it pretty safe to say that the Forester is pretty much entirely responsible for Subaru sales being up 8% for the month?

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • steverstever Viva Las CrucesPosts: 41,582

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  • ateixeiraateixeira Posts: 72,587
    I'm not certain but I'd bet on it. I read a headline from Automotive News about the 8%, no detailed breakdown. I'm sure we'll see that soon.

    Yeah, January 2008 they were still selling the last generation Forester. Even in March supply was very limited.

    So April onwards will be key, same model vs. same model.
  • paisanpaisan Posts: 21,181
    Bottom line, in 2008 there were 3 car companies that INCREASED their sales...

    Rolls Royce
    Mini
    Subaru

    Of those the only one that sells more than 2 models is Subaru...

    Period, undisputable FACTS...

    -mike
    Subaru Guru and Track Instructor
  • dtownfbdtownfb Posts: 2,915
    "Of those the only one that sells more than 2 models is Subaru...

    Period, undisputable FACTS... "

    And that means what?
  • ateixeiraateixeira Posts: 72,587
    They're the only automaker with significant sales volume that grew.

    Mini is basically a subsidiary of BMW anyway.
  • rshollandrsholland Posts: 19,710
    ummm... Not sure I agree with that.

    Mini is a separate brand, just as is Lexus, Dodge, etc. Yeah, it may be owned by BMW, but it's a brand unto itself.

    Bob
  • nippononlynippononly SF Bay AreaPosts: 12,693
    Mini sales were up more with the addition of the Clubman (and the intro of the revised Cooper) than Subaru's were with the debut of the new Forester and '09 WRX!

    Two brands that had the exactly right product at the exactly right time for the market. ;-)

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • ateixeiraateixeira Posts: 72,587
    Unlike Scion, which did the exact opposite (cars grew just as shoppers moved towards smaller cars).
  • jeffmcjeffmc Posts: 1,742
    All this talk of Subaru dropping out of the WRC makes me pipe in here, though a little late to be timely to the conversation. The WRC's new Super 2000 class rules specify transverse-mounted engines only. More than Subaru leaving the WRC, the WRC left Subaru. There's no way a small manufacturer is going to redesign their entire engine design philosophy simply to compete in WRC.

    http://www.fia.com/en-GB/sport/regulations/Pages/FIARallyChampionships.aspx
  • ateixeiraateixeira Posts: 72,587
    What a strange rule?!
  • nippononlynippononly SF Bay AreaPosts: 12,693
    That's the problem with all series like the WRC, too many odd rules. One might come to the conclusion that some are designed specifically to exclude a single manufacturer.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • steverstever Viva Las CrucesPosts: 41,582
    "Despite bucking the downward U.S. sales spiral, Subaru parent Fuji Heavy Industries reported Tuesday it had widened its loss forecast, largely due to writing off components supplied to bankrupt aircraft-maker Eclipse Aviation Corp., of Albuquerque, New Mexico. Fuji supplied the wings for the Eclipse aircraft.

    Fuji said its net loss may total $233 million for the year ending March 31 and it won't pay a year-end dividend for the first time in 14 years."

    Subaru and Mitsubishi Among Japanese Makers Seeking Government Loans (AutoObserver)

    image

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  • nippononlynippononly SF Bay AreaPosts: 12,693
    is going to sink Subaru just when it pulls off the neatest hat trick in the book - being the only automaker with increasing sales in the deepest recession since the 30s!

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • kyfdxkyfdx Posts: 30,485
    I could be wrong (really, I mean it), but I think later this year, once the comparable sales numbers include the months from last year when the new Forester was available, you'll see that Subaru sales have tanked similarly to other Japanese manufacturers... (is that a run-on sentence, or what?).

    Waiting patiently to be proven wrong...

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  • nippononlynippononly SF Bay AreaPosts: 12,693
    Subaru sells a half dozen different models, not just the Forester, and the fact remains that for CY 2008 they were the only ones to be up for the year.

    If Subaru is the only profitable unit of FHI, maybe it would be better for Sube to be bought by Toyota, they already own 19.9% is it? As much as I don't like to think of Subaru being owned by another automaker, the fact is FHI is dragging Subaru down.

    Of course, would FHI sell? Probably not.

    2013 Civic SI, 2009 Outback Sport 5-spd (stick)

  • I know this is a response to an old post, but I came across it and figured I would resond...Sioux City, IA now has a Subaru dealer. www.jensen.subaru.com
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