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

dino001 · November 2007

If you want leather as well, you will be at $29K in the blink of an eye. Pricey

It's worse, Nippon. 29 grand would not buy you even leather - just Nav.

nippononly · November 2007

Forester was an important way for Subaru to leverage the Impreza platform for increased profits, but I would disagree that it made a name for Subaru. The models that own that segment are CRV, RAV4, and Escape, and Forester is a distant 4th in name recognition and sales. Heck, Jeep Liberty is probably at 4th, with Forester at 5th...

dino: you mean even at $29K the WRX still has cloth seats? Subaru has clearly continued, even reemphasized its tradition of strange content packaging choices...

dino001 · November 2007

YES - 29.5K buys you cloth seats, no sunroof, 5-speed manual, no HID, dull interior. For comparison, about $24.6K sticker in Mazda buys you over 30 hp, similar straight line performance (worse off-line start is offset by better high speed acceleration), 6-speed manual, beautiful interior for the price, HID, leather seat bolsters, sunroof, Bose stereo and more (Speed3 Grand Touring sticker). Add 1750 you get Nav. Lets round it up to $26.5K

So, in Subaru's mind their AWD is worth about 5 grand (you must adjust to feature downgrade to make fair comparison) Talking value pricing here :sick: :sick: .

The only real thing they have going is significantly better historical crash perfromance (IIHS already gave them good for front and side will probably come good, too). As much as safety oriented I may be, if I am a mainstream buyer (remember? - these are the new dream customers), I don't know if I'll be willing to shell out 5 grand for privilidge of driving AWD.

It's plain and simple - WRX simply doesn't cut it any way you look at it. 2.5i is fine, in my opinion - perhaps even more than fine. WRX is simply not good enough for the price. It's not 2002 - the competition caught up, at least in the packaging dept.

ateixeira · November 2007

Dan Neil can try all the humor he wants, but Subaru gets to laugh last when he realizes they just had another record month (is that two in a row now?).

WRX is their halo car, sure, but let's face it, the Outback and the Forester pay the bills. Subaru was thriving in 2001 right before the WRX even came out here.

I agree about the "many faces of Subaru" argument, though. There hasn't been any consistency whatsoever, and the concepts they just showed at Tokyo only continue that trend.

nippononly · November 2007

Here we go again with the record month thing. How many actual units sold was the increase? Will they make 200K sales this year? That's what they did last year, right? Which was a decline from earlier in the decade by a few thousand units?

Subaru could make better inroads with the new Impreza 2.5 and Legacy 2.5, I think, if dealers actually stocked them. But since Subaru is the WRX-and-Outback company, that is literally 80% of what the dealers around me stock (with a few Foresters and Tribecas thrown in for good measure to round out the 100%). The new Legacy 2.5 SE is about $21K sticker, and VERY competitive at that price, I think. But I did a 6-dealer search last night that took me out well beyond a 50-mile radius, and turned up exactly one Legacy sedan with the NA engine. But every dealer had 20-30 Outbacks apiece, and a similar number of WRXs. I tried a new search, this time for Impreza 2.5i's, found maybe half a dozen in the whole area.

I don't blame the dealers - their large profit margins are in Outback and WRX sales. But Subaru can't hope to appeal to a wider audience if that is ALL the dealers are stocking.

ateixeira · November 2007

You seem to see the glass-half-empty.

The overall market is down. The WRX has been out for 2 months and so far it has done well in the US and overseas. Subaru has done well in those 2 months in the US, so the new WRX may be drawing in more casual browsers, too.

I am predicting the Impreza will continue to do well (glass half full). Subaru's market share will pick up when the Forester arrives, though the market is going to tank (*), so that might offset any gains.

* I guess there's my glass half-empty thinking

jeffmc · November 2007

"The new Legacy 2.5 SE is about $21K sticker, and VERY competitive at that price, I think."

Wholeheartedly agree... one of the best values in the lineup. I love mine.

I'd still take one over the new design Impreza for around the same price. When we bought ours over a year ago, my dealer had a pretty good selection of NA sedans. Lemme check... Yep, my dealer has 5 SE sedans (2 MT, 3 AT) and 1 Limited (AT). Not a huge inventory, but a fair amount to choose from. Outbacks, though, yes there are a ton on the lot.

rsholland · November 2007

They're hot in the summer and cold in the winter. I'd take cloth any day of week over leather.

Bob

nippononly · November 2007

Maybe so, BUT a lot of people shopping $30K cars expect to sit on leather. It's just the nature of the market. I like cloth more too, but this may be a comparative disadvantage for the WRX Premium.

As for the Legacy SE, it strikes me as the best deal in the whole Subaru line-up, closely followed by the Impreza Premium.

The WRXs and Outbacks are getting too expensive for what they offer. But there's your profit margin if you're the dealer....

jeffmc · November 2007

Hey, now... some of us live in climates where it doesn't get very hot or cold.

Plus, leather's easier to clean up, especially with Subaru's pale ivory cloth interiors, which I have on both of my Subies. Anyway, it should be an option at least. I'm sure we'll see it as a mid-year addition or on the next model year.

rsholland · November 2007

I'd rather see them bring back the moonroof option than leather.

I've got leather in my WRX Limited. It's nice, but I'd rather have cloth.

Bob

ateixeira · November 2007

Now that I can agree with. Both the Legacy SE and the Impreza Premium are the best values in those car lines.

I hope the 09 Forester follows the packaging for the Impreza, which would put a Forester Premium in our driveway around March 2008. :shades:

Your Impreza prices are WAY high. Subarus don't sell for MSRP. We can't talk about bargains on SEs and then quote list prices for WRX in the next post. That's bogus.

From fitzmall:

WRX - $23,032
WRX Premium - $25,067

About $5 grand under $30k by my math.

nippononly · November 2007

Sorry if I had my math wrong, juice. But according to Subaru's website (and going by memory) the Legacy SE was around $21K, the Impreza Premium was $19K, the base WRX was around $25K, and the full WRX Premium package with NAV was $4100 more. That's $29K in my book. There's also a cheaper WRX Premium package that includes a few things but not NAV, which is about $2000.

All models I researched were stick shifts, so add money accordingly if you prefer automatics.

All my comments included sticker prices, and I am well aware there isn't a Subaru available right now which is going for full sticker. Real-world prices for all models I mentioned would be lower than sticker. Just as they would for models that compete in the WRX's price range. The sticker price is merely useful as a frame of reference for comparison.

ateixeira · November 2007

We're just talking about different things, i.e. MSRP vs. price paid.

If we compare prices to what Jeff paid, we should use street prices. So I looked a few of them up.

The WRXs were manuals as well. They only had the 2.5i Premium models in automatics, but those were still in the $18s. Amazing.

It is a big step up from the 2.5i Premium to a WRX, nearly $5 grand and that's giving up the automatic.

Again, I'm hoping they do the Forester lineup in a similar fashion.

One important note: the MazdaSpeed3 in low supply/high demand so I believe people are indeed paying close to sticker for those.

Edit: I looked. Full MSRP is fitzmall's value price for a Speed3. About $300 off for the internet price.

tifighter · November 2007

Mainly, I guess I was not expecting to see so much lukewarm, even negative press about the new WRX release. When the RSX was released six years ago, folks then said some negative things about how it had lost the raw playful edge of the preceding model (just as they are now with the WRX), but at least they also had to concede that it was a lot faster, a lot more competent, and more nicely outfitted for not a lot more money. I don't hear that being said about the WRX.

FWIW, Car and Driver has some nice things to say about the WRX in the Dec 07 issue; they sum it up as 'budget BMW in a plain beige wrapper.' They praise the ride/handling compromise, and the overall leap in refinement. Could be worse.

Does Subie sales by model ever hit the public? I'd be willing to bet that the Forester, last model year and all, still outsells the Impreza or the WRX. Sure, it might sell less than the CRV, RAV, etc in the cute-ute category, but a small piece of a big pie...yadda yadda yadda

jeffmc · November 2007

2006 US totals: Forester -4% to 51,258, Impreza up 22% to 41,148. So Impreza had a great year in '06, and Forester a down year, yet Forester still outsold Impreza by about 20%. I think those trends have continued in 2007, so perhaps Impreza and Forester will be neck-and-neck down the stretch this year. I do know Impreza has outsold Forester in each of the last 3 months, but I don't know about the year-to-date totals.

ateixeira · November 2007

Impreza may even tie the Forester this year, but when the new Forester comes out I bet the gap will stretch significantly.

A lot of people don't think the Forester is big enough right now, so the growth is more significant, and the compact crossover market is one of the very few segments that is actually hot and still growing.

Say what you want about the RSX, but it was dropped and the WRX lives on.

C&D picked a WRX 2nd in a comparo. I beat the Volvo C30 and Caliber SRT-4 but they picked a Speed3 despite complaints about torque steer.

I like the Speed3 but if you think about it the prices are higher than they were for a Speed6 last year, and that was bigger and had AWD! :surprise:

dino001 · November 2007

I like the Speed3 but if you think about it the prices are higher than they were for a Speed6 last year, and that was bigger and had AWD!

??? :confuse:

Speed3 Sticker starts at roughly at 23K, grand touring is $24.5K. Speed6 starts at 28.6, Grand Touring is 30.5K. Even at invoice and little cashback can't be less than 25K, can it?

But then compare to almost 27.5K for WRX (premium no nav) and you lose moonroof, HID, 6-speed manual, nicer interior and a few minor features, gain AWD, which makes AWD "worth" about 5 grand - at least according to Subaru (sticker price). On that alone Speed3 should win. Torque steer cannot be worth that much.

dino001 · November 2007

They left out GTI (which BTW they had separate test in the same issue :surprise: ) and A3 2.0, which at least had a potential of scoring good points. Perhaps price cap was an issue.

ateixeira · November 2007

Sticker price is pure fiction.

Use my real-world prices. I even used the exact same dealership, so you know you can compare them side-by-side.

It's been a while but I seem to remember Speed6 owners paying $21-23k not too long ago. Now that's a bargain. :shades:

dino001 · November 2007

Sticker price is pure fiction

Not really - just sometimes. Those crazy low prices of Speed6 were a short 2007 blowout episode when Mazda pumped some big incentive. May be repeated, but not for a while. Today you can have for less than sticker, but I don't think $23K is even an option.

ateixeira · November 2007

Those kind of deals were around for a few months, it wasn't just a week here or there. A couple of Subaru Crew guys couldn't resist and snapped up bargains, and I can't say I blame them.

I think they cut production, though I'm surprised the Speed6 made it to a 2nd model year given how many incentives it required to sell.

The Speed3 has the opposite problem - more demand than supply, so MSRP it is, at least for now.

dino001 · November 2007

It's interesting how market segments work, isn't it? So why oh why, seeing such success, would Subaru think that dull interior (even if refined in terms of fit and finish, but totally uninspiring), giving no premium content and putting soft springs were a god idea at 25-30K?

ateixeira · November 2007

As much as the WRX was loved, it was also heavily criticized. No stability control at that price? Absurd. Cheap interior. No NAV? Choppy ride from a too-short-for-2007 wheelbase. Where were the side curtain aribags? Kias had them.

Subaru addressed the things the WRX was criticized for. The content will be added later, just as they did for the first WRX in the US.

They did sort of "play it safe", but basically they removed most of the excuses someone would have in that price range for ruling out the old WRX.

They're selling for $23-25k, which is less than the average price for a car nowadays. $25k ain't what it used to be. $25k is below average pricing for a new car.

The BMW 135i is expected to start at $33k, and I bet options will push prices at least $10 grand higher than a similar WRX.

dino001 · November 2007

You're right - they removed most of excuses of not getting one that were in place in 2002. In 2007/2008 there are new excuses, but Subaru did not "notice". They have this annoying 4+ year "adjustment period" with almost everything that is not their core strength. Yet, they continue to sticker them as they had all that stuff in.

Then of course everybody is surprised that they go at invoice and need cashbacks three months into new model.

rsholland · November 2007

Sticker price is pure fiction.

Depends on where you live. It may be true in highly populated areaswhich is where you an I livewhere there are a lot of dealers who are willing to "deal." I don't think that's true once you get 100 or more miles beyond the big cities, where there may be only on Subaru dealer within a reasonable distance to consider. I think trying to get a good deal on a Subie in Nebraska or Iowa is rather unlikely.

Bob

dino001 · November 2007

Nebraska may be OK - my guess the worst place to get a good deal is rural New England (if there is such a thing) or Mountains. Large demand not high coverage.

I would guess the best place to get a deal on Subaru is where I live - urban place in Sunbelt. No name recongnition, yet enough competition to make those poor dealers desperate enough to beg you to buy it.

But I may be wrong - what do I know.

rsholland · November 2007

Juice and I both live in the Baltimore/Washington area, and there are a ton of Subie dealers. We've both bought are Subies at the same dealer that is well known for having some of the best prices anywhereso we're spoiled.

My point is simply, once you get away from the urban centers, car dealers for any brand, are further away. Customers don't usually have huge selection to cross-shop from. Heck, where I'm at there are probably close to a dozen Subaru dealers that I would consider. You won't find that kind of choice in the Hicksville, USA.

Bob

dino001 · November 2007

Out of curiousity - most Subaru dealers here are attached to mid/upscale stores, where Subaru would be lowest brand sold. One dealer is stand-alone (small family store), another is attached to BMW/VW/Masetatti/Hummer/Audi, another to MB/Volvo/VW, another to Porche/VW. Is that the case elsewhere as well, or is it Tampa Bay coincidence?

rsholland · November 2007

I guess it depends on where you live. We have a number of Subaru/VW dealerships around here. Most of the Subies are paired with more mainstream brands in this area. I can only think of one MB/VW/Porsche/Subie dealer around here.

Bob

mb789 · November 2007

A dozen Subaru dealers?? That must be nice! We have two in my area, and they are several miles apart. The next closest one after these is about 30 miles away. I would like to see a couple more in my area.

rsholland · November 2007

From where I live, within roughly a 30 - 40 mile radius, there are about 12 Subie dealers. I'm located between Baltimore and Washington, so I can hit dealers from both metropolitan areas. Within 20 miles, there are about 5 or 6 dealers.

Bob

moparbad · November 2007

I grew up in Sioux City, IA and there is not a Subaru dealer within 70 miles. 85,000 people in the city alone and probably 150,000 in the Siouxland area. No Subaru dealer. No VW dealer.

dstew1 · November 2007

From the one in Little Rock, AR, the closest dealerships are one in Memphis and one in Fayetteville, each about 2.5 hours away.

In total there are only about eight dealerships within a 220 mile radius of Little Rock. That covers about 150,000 square miles - an area the size of Montana, populated by about 7 million people.

rsholland · November 2007

Get away from the large urban centers, and Subie dealers "can be" much harder to find. When you do find one, negotiating a good deal may be much harder, as it's a seller's market, not a buyer's market.

Bob

dstew1 · November 2007

You're right - negotiating in this scarce market is not... uh... "encouraged."

If you are informed/interested enough to show up at one of the few dealerships, you're obviously not there by accident. When you walk in the door, they know you want their product, otherwise you wouldn't have passed by the dozens of Ford/Toyota dealerships just to come to their tiny showroom. So you want a product they sell, and they are the only supplier of that product for several hours around. This scenario definitely gives the dealerships the advantage when it comes to "negotiations."

kyfdx · November 2007

That's not unusual for Arkansas... I think you would find the same concentration of BMW dealers.

ateixeira · November 2007

OK, good point, you got me.

My guess is the worst place to get a deal on a Subaru is....Alaska. I think they have 2 dealers in the whole state. People drive down to Seattle to buy one at a reasonable price.

If we go outside the US, Canada is even worse. Subarus are priced higher vis-a-vis the competition. Then again, they also get more content - like heated seats on just about everything.

However....

I bet if you were looking for a MazdaSpeed3 in Alaska you'd have trouble finding one at all.

That is purely an educated guess. Feel free to correct me!

I do know that Miata PRHT models are impossible to find, and people pay full MSRP and still have to wait several months to get them. Join the thread and read about the adventures some people have finding one - even where there are lots of dealers. Some dealers didn't get any!

dstew1 · November 2007

You're right; we've got two BMW dealerships in the entire state - the same as Subaru dealerships. But I see a LOT more BMWs driving around than I do Subarus. Five to ten times as many, probably.

nippononly · November 2007

today at that C&D comparo referred to earlier: the WRX was the slowest, almost the heaviest (one other car weighed 4 pounds more), the most expensive as-tested (because it had the huge NAV Premium package), might have had the highest base price (does the Volvo cost a little more at base price? I forget) and the most gas-guzzling.

The Volvo was voted the nicest for a daily driver, while the Caliber SRT and the Speed3 were the track-stormers. I guess the WRX was somewhere in between. The Volvo has an optional sport package with better suspension and larger rims and tires, which was not equipped in the comparo. All four were criticized for junky shifters. And Subaru is still using Potenza RE92s on the WRX? That's what the magazine tester had. What a crappy tire. It was a notably cheap choice for rubber in comparison to the others there.

OTOH, WRX was the only one that wasn't a front-driver, so if you are willing to give up quite a bit for the benefits of AWD, it might be your pick. It has me thinking this is not the way to expand out of the Snow Belt.

ateixeira · November 2007

You omit that it came in 2nd place and is probably the best balanced choice.

Subaru has *got* to ditch the Blow-tenzas.

Did you guys see the Forester sketch? I like it, my wife LOVES it...

http://blogs.edmunds.com/Straightline/3744

Hope it's accurate. We're all over a 2009 model.

british_rover · November 2007

The C30 does have a bit of a sloppy transmission but you can fix that with a short shift kit. The 2.0 with the dynamic chassis really does firm up the ride to just the right amount. Its not as nimble as a MINI but it is much more comfortable on the highway and weighs a few hundred lbs more so that is ok.

nippononly · November 2007

Yes, well you can fix up the WRX with an inexpensive short shifter kit too. My question to the audience at large is why the HECK they don't just make those short shifters standard???? With the possible exception of the Volvo, these cars all have sport as their primary mission.

They said the WRX's shifter felt like it was attached to the transmission with bungee cords. :-P

rsholland · November 2007

There's nothing wrong with the standard shifter on my '06 WRX. It's not anything like what you describe.

Bob

nippononly · November 2007

Not my description, Bob. But your '06 may be different from the '08, who knows. Certainly if it is the same shifter as in the 2.5i that I have driven, then it is acceptable but nothing to rave about, and most of Honda's shifters put it to shame.

rsholland · November 2007

I've driven 4 different '08 WRXs, and they shift as well or better than mine.

then it is acceptable but nothing to rave about, and most of Honda's shifters put it to shame.

Gimme a break... Yes, Honda has excellent shifters, but we're talking about subtle differences here. You've obviously never driven a car from the 1960s or earlier. Now those were truly awful gear shifts. ...And yes, those comparisons are relevent, as I have memories of what really bad gears shifts are like. So while the Honda may have an excellent gear shift, the WRX is still pretty darn good. Again, I have no compaints with mine or the new '08s.

Bob

zman3 · November 2007

then it is acceptable but nothing to rave about, and most of Honda's shifters put it to shame.

Gimme a break... Yes, Honda has excellent shifters, but we're talking about subtle differences here.

I have driven Honda manuals as well as a single drive with an 05 OB manual. I agree with nippon, I think there is a huge difference between Honda shift feel and Subaru shift feel. The Honda seems much more smooth.

ateixeira · November 2007

Not quite attached by bungees, but there is a rubber layer of insulation there.

A picture is worth 1000 words, see below.

The top is the SPT short shift kit for an Impreza. Basically it's all metal. The urethane bushing is covered in thick grease but basically it's metal to metal, direct feel.

The bottom is the standard shifter for a 1998 Forester. Ignore the fact that it's an inch taller, that's because the Forester's seats sit higher. A stock Impreza is the same length.

Note, however, that the standard shifter is insulated with a rubber layer (that's the wide part of the shaft). This deadens vibrations from the driveline, but it also can create the bungee feel nippononly mentioned.

It's not *that* bad, there is only a very tiny amount of "give".

british_rover · November 2007

The C30 has the same transmission as the S40 and I am sure from a cost perspective they didn't bother to modify it one bit. Its been a long time since I drove a manual tranny Subbie but it didn't really impress me when I drove it. I haven't had a chance to go next door and try out the new WRX yet. I might do that next week.

boaz47 · November 2007

what to think about Subaru. It is nice to have them around because they offer a choice that some people like. My wife loved her old Subaru, and would have considered getting another one but getting a deal on one in Southern California is a lot harder. They aren't needed here like they might be in the snow belt. Though for a while they were very popular in the mountains. CR-Vs and Rav4s seem to have replaced some of the old Subarus as a mountain car. But like some others have posted here, there is only one Subaru dealer within 40 miles of here and they know all the mountain residents have to come to them. So there are no deals to be had.

Still Subaru will more than likely have to stay a niche car rather than mainstream. To become mainstream they would have to give up too much of what makes them different and without that difference there simply is no reason to pick a Subaru over a Honda, Toyota, Mazda or even a Ford Focus. If you have no need for AWD and you live in the Sun Belt the sacrifice in fuel mileage is simply too great. That becomes a big problem when the other manufacturers have so many entry level vehicles that can be had for under 15k.

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

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