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

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  • ateixeiraateixeira Posts: 72,587
    Yep, OB came out in 05 and just got the mid-cycle refresh for 08. The new one should arrive for MY2010, and test mules are already circulating.

    To answer the question in the 2nd paragraph, yes, to some extent, Subaru customers tend to be more affluent and could afford a more expensive car, but they simply choose not to.

    A while back we had a letter writing campaign to try to get official presence on Edmunds.com, but what was eye-opening was all the letterhead members used to send me the letters (I collected them and submitted one single package). Unbelievable. VP of this, CEO of that. I could not believe my collegues were in such high positions, I was so impressed.

    So for the most part, people that can afford to spend more would still be able to make a purchase. I'm not sure if they would postpone it or not, I guess we'll see.

    I fully expect a recession yet we've saved up in advance, so I'll be Forester shopping as soon as the new one arrives.
  • paisanpaisan Posts: 21,181
    Unbelievable. VP of this, CEO of that. I could not believe my collegues were in such high positions, I was so impressed.

    I'm a CEO of my own company :) and was a VP at Prudential. In the financial world the VP title is almost an entry level position.

    I think that a lot of the core subaru customers are professors, teachers, etc. who basically are fairly insulated from economic downturns. This helps maintain their customer base in such economic times.

    -mike
    Motorsports and Modifications Host
  • nippononlynippononly SF Bay AreaPosts: 12,693
    is that Subaru's sales now are actually LOWER than they were in calendar 2004, the last full calendar year upon which this thread was founded in 2005. And the 201K sales goal in 2005, revised downwards twice to that figure from 250K originally, has never been met since.

    But the other crucial piece of their problem back in '05, the huge swaths of red ink at SIA, has been cured by Toyota, which is now cranking out Camrys to the tune of 100K per year in Indiana, IIRC.

    Funny statistic: Toyota just about sold one Prius for every Subaru (all models combined) sold in 2007. :-P

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

  • ateixeiraateixeira Posts: 72,587
    True, but the 2 latest intros have been successful, i.e. the revised Tribeca and the new Impreza. Each has set sales records since they've been out.

    2007 was bad mostly due to sales prior to those intros.

    If you compare model year 2008 to model year 2007 they've improved.
  • nippononlynippononly SF Bay AreaPosts: 12,693
    I was glancing at the Detroit show news on MSN, and noticed that Mitsu is now going to sell a Lancer Ralliart that is more than tack-on pieces and alloys, but instead competes directly with WRX? 2L turbo making 235 hp, 6-speed SST-automated manual (no stick and three pedals, blecch!), all the prerequisites to go head to head with WRX. Should WRX worry?!

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

  • rshollandrsholland Posts: 19,710
    Absolutely it should worry. My take is that the new Ralliart will put WRX product planners on fast-forward with a "new and improved" v2.1 WRX.

    Bob
  • paisanpaisan Posts: 21,181
    Absolutely it should worry. My take is that the new Ralliart will put WRX product planners on fast-forward with a "new and improved" v2.1 WRX.

    I agree. I also think that this is part of their plan. In the commodities trading world we have a saying "don't use all your bullets in one shot" or "save a few bullets for later". If Subaru came out with a total kick-butt car off the bat, they'd have nothing to one-up mitsu with later on. I think this is the key reason the STi and WRX both have essentially the same powerplants as the last gnerations.

    This gives them the opportunity to come out with a hopped up WRX and STi in a year or 2.

    -mike
    Motorsports and Modifications Host
  • waltchanwaltchan Posts: 123
    Subaru can gain sales again if they offer at least a small three door hatchback with an optional AWD. Back in the 80s and 90s, there was the Subaru Justy that gets great MPG (around 50 MPG highway) and comes with a 3-cylinder engine with a CVT transimission. It bagan production in 1987 in the US and discontinued in 1994. I inquired about the Justy at the 2008 LA auto show and to see if if anything similar like the Justy will come back in the future, and I was shocked to find out that none of the Subaru reps has heard of Justy. That's pretty sad. Did Subaru forget to make a fuel-efficient car that was once top in the 80s? Today's Subaru get awful fuel economy.
  • nippononlynippononly SF Bay AreaPosts: 12,693
    Word is that a 50-state diesel for many of the Subaru models is only a couple of years out, and it should substantially improve Subaru's fuel economy.

    I would like to see them borrow some of the hybrid stuff from Toyota and mate it with the 2.5 as well. A hybrid Impreza with a threshold speed of 35-40 mph would be FAST and still manage mid-30s or better for mpg in town, I would think.

    As for the Justy, GOSH I wish they would sell the new Justy here:

    http://www.worldcarfans.com/9071123.005/all-new-subaru-justy-announced-for-uk

    Note that while this article only makes mention of the 1.0, the Sirion that the new Justy is based on also has an optional 1.3L engine, with which it makes the 0-60 cruise in about 11 seconds. Sell it in the States, Subaru!

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

  • jeffmcjeffmc Posts: 1,742
    I'd have to say no thank you to that, nippononly. I don't want to drive a FWD Daihatsu. The Justy is likely a temporary stop-gap to help bolster Subaru's European sales. Subaru will be introducing their own global subcompact, at which point they won't need the Daihatsu-sourced Justy. What I DO want is the Honda Fit-sized G4e Subaru concept, developed and built by Subaru. G4e (or a gasoline version of it) may be that global subcompact.
    http://www.edmunds.com/insideline/do/News/articleId=122961
    image
  • ateixeiraateixeira Posts: 72,587
    235hp will put pressure on the WRX, without a doubt. Subaru did not boost power when the new WRX came out, it still makes the same 224hp as before.

    Also, Subaru has limited what options are available, and people are complaining loudly about that - no moonroof, no leather, for instance. I think that was planned and they'll phase those in next model year (Limited models).

    But now there's pressure to boost power as well.

    To me, Lancer has 2 strikes - sedan only, no 5 door model, and no true manual.

    I think it will definitely pose a threat, though. Americans tend to prefer sedans, and while enthusiasts like us want manuals, I bet their SST will appeal to a broader market.
  • ateixeiraateixeira Posts: 72,587
    I like those, in fact that's about as good as a car that small can possibly look.

    Thing is, that will never do a lot of volume. It might help CAFE numbers and boost the "green" image for Subaru, but that's not what will sustan 200k sales/year for them. No way, no how.

    Having said that, I'd shop for one, sure, especially if it came with a panoramic moonroof or glass roof of some sort.
  • nippononlynippononly SF Bay AreaPosts: 12,693
    Well the Mitsu SST 6-speed has the performance numbers to sell successfully, I think, even if it IS an automatic. The 4-speed "Sportshift" TC auto in the WRX is most uninspiring by comparison! But then, WRX tends to sell in a very healthy proportion in manual shift.

    Perhaps they will split this market - the manual buyers will all buy the Subaru of course, and the automatic buyers will mostly buy the Mitsubishi.

    jeffmc: fine, Subaru could bring the G4e then - I really liked the look of that one. But bring SOMETHING Subaru, and bring it soon! I figure the G4e is at least two, maybe three years away from reality?

    I see the '09 Forester will sit on the reinforced version of the Impreza chassis that the STi uses, and I wonder how much that will increase its weight, given that it will use the same engines as the new Impreza (minus the STi), right?

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

  • ateixeiraateixeira Posts: 72,587
    Yeah, I think 85% of WRX are manuals, something like that. Subaru didn't invest much because frankly noone cared. I think a CVT may arrive before a 5th ratio ever does.

    The problem with SST is no matter how good it is, in this segment it's an uphill battle, people want a clutch.

    Forester specs are out. It gained less than 100 lbs, not bad considering it got bigger in every dimension. Also, it's some 250 lbs lighter than a RAV4 and a whopping 350 lbs lighter than a CR-V.

    It looks very promising. I'm hoping they didn't kill the car-like handling, clearance is high at 8.7-8.9".
  • nippononlynippononly SF Bay AreaPosts: 12,693
    People here at work who are interested in Subaru or in buying a Forester (and yes there are more than a few satisfied Forester owners here) have all applauded the update in exterior styling when I have showed them pics. The consensus seems to be "about time, and BOY does it look better than the old car".

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

  • ateixeiraateixeira Posts: 72,587
    The old boxy model was function over form. It was as if they first designed the cargo area, and then the sheetmetal that went around it. It was very practical. I owned one for 9 years.

    The new one is more attractive, for sure. I like it, but my wife loves it.

    It's still under 180" so it didn't grow TOO much. If it did it would alieante a lot of buyers. A few were even upset that it grew at all.

    The WRX 5 door is shorter than before, so now there's no overlap. The Impreza hatch is small, the Forester much bigger. Should reduce cross-shopping.
  • ateixeiraateixeira Posts: 72,587
    I'm surprised he didn't talk more about the Forester.

    I've been asking around, since I'm shopping for an 09 Forester, and was told there will be no special introductory offers for the Forester, like there was for the 2006 Tribeca. There will also be no special guaranteed trade-in allowance program, like they did for the 2008 Impreza.

    Also, I was told there won't be VIP pricing for the Forester at first, that I would probably have to wait at least a month or two.

    So they are very confident about the 09 Forester selling well from the get-go.

    They were actually worried about the new Impreza, over concerns of design acceptance, but even those proved wrong, as December sales proved.

    Still, I think we're in a recession, and will only realize that a year or so from now. January's seasonally adjusted annual sales rate was 15.9 million cars/year, and a good year is 17 million. So I do no expect a good 2008, as I've been predicted for a while now.
  • tifightertifighter WAPosts: 1,391
    Bummer about no GTP for the Forester; it would go a long way towards me making the jump to the '09. Its loss will make me take a closer look at the competition for sure.

    15 Leaf / 08 RDX

  • nippononlynippononly SF Bay AreaPosts: 12,693
    Uh oh, they are making sales forecasts again! 230K by 2010? Will we have to revisit here in about three years? ;-)

    I agree very much with what he says about the Forester in that article - it is every bit as good a value as the CRV, lacking only the cachet of the Honda name. It would be gratifying to see Forester sales pick way up this year, as juice seems to imply SOA thinks they will.

    I am surprised that they are surprised that Impreza hatches/wagons are selling better than the sedans - hasn't that always been the case with Impreza (and other models too) at Subaru?

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

  • ateixeiraateixeira Posts: 72,587
    I'm not sure.

    The original RS, which came out in 1998 IIRC, only came as a coupe.

    When the sedan model came out, it outsold the coupe by a wide margin.

    Subaru owners are practical people. It doesn't surprise me at all that the 5 door outsells the 4 door, just like the 4 door used to outsell the 2 door.

    230k by 2010? That's optimistic, but I'm sure they're hoping for a big success from the next Legacy and Outback, which will grow bigger and probably offer both diesel and 3.6l H6 engines.

    It's possible. Likely? Tough call. Let them hit 200k again first.
  • nippononlynippononly SF Bay AreaPosts: 12,693
    "Let them hit 200k again first."

    I will second that. 2010 is also the year Toyota will have a brand new RAV4 - fierce competition for the Forester if Toyota does any kind of decent job on the update. And there are no new models in the pipeline for the Subaru brand in NA before 2010. So Impreza will gradually trend down in sales, as will Forester, and Legacy/Outback will have to pick up all that slack AND sell another 30K units at least to make the 230K sales goal. I'm not saying it is impossible, but based on the last 25 years, I would say it is unlikely.

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

  • rshollandrsholland Posts: 19,710
    Next spring, or summer, the larger all-new 2010 Legacy and Outback will be here.

    Bob
  • ateixeiraateixeira Posts: 72,587
    Yeah, and who knows what Toyota will do to the RAV4. I thought it would grow, but the Highlander is still not that much bigger, so probably not. I had expected the Highlander to grow to CX9/Acadia size.

    The new Forester may hurt Tribeca sales, especially the 5 seater. It's almost as big for $5 grand less. Maybe $2 grand if we're talking turbo.

    The next Tribeca needs to grow bigger - to further distinguish itself from both the Outback and Forester.
  • nippononlynippononly SF Bay AreaPosts: 12,693
    the new Tribeca due? The competition is sooooo fierce in the segments where Forester and Tribeca are doing battle!

    Toyota launches the Venza this year, basically a Camry wagon/hatch. Honda ALMOST brought over the last Euro-Accord wagon...maybe if Toyota does well selling the Venza, Honda will also introduce an Accord wagon in a couple of years. The new Legacy could face some stiff competition, although it remains to be seen if any competing wagons will offer AWD.

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

  • paisanpaisan Posts: 21,181
    Don't forget we have not seen the refinements of the Impreza driveline and tweeks in the offerings. In the Imprezas we'll see more power, moonroof, and better driveline options offered in the next few years. They filter that stuff in over the first few years.

    I fully expect to see a more powerful engine and upgrades to the AT and MT gearboxes and moonroof/leather options available.

    -mike
    Motorsports and Modifications Host
  • nippononlynippononly SF Bay AreaPosts: 12,693
    On the flip side, Toyota has just reintroduced the AWD Matrix. You get the 2.4L engine, more room than the Impreza, and that moonroof you just mentioned as an option. The limiting factor is it is offered in 4-speed automatic only, which will be a handicap in a couple of years when the Impreza has more gears.

    But this year (and probably next before Subaru updates the Impreza), the two will square off, and AWD Matrix sold pretty well last time it was here.

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

  • paisanpaisan Posts: 21,181
    No MT option in AWD Trim would leave it off my list.

    Also what kind of AWD system does it have? My guess would be a FWD with Rear Drive re-active.

    -mike
    Motorsports and Modifications Host
  • jeffmcjeffmc Posts: 1,742
    "the new Tribeca due?"

    Believe it's not til 2010 as a MY 2011... though they seem to be making a push for quicker updates. Was supposed to be at least one model a year... '08 Impreza in 2007; '09 Forester in 2008; '10 Legacy/OB in 2009; '11 Tribeca in 2010.

    "Toyota launches the Venza this year, basically a Camry wagon/hatch. Honda ALMOST brought over the last Euro-Accord wagon...maybe if Toyota does well selling the Venza, Honda will also introduce an Accord wagon in a couple of years. The new Legacy could face some stiff competition, although it remains to be seen if any competing wagons will offer AWD."

    In order for there to be competition in the US, SOA would first have to decide to re-enter Legacy into the wagon market. Shocking to think about, really... that Subaru's essentially out of the sportwagon niche in the US. It'll be really interesting to see what happens to the next Outback as Subaru continues to differentiate between models. Will they continue to push it more toward an SUV, or will it become more of a Legacy wagon replacement so as not to compete w/Forester & Tribeca? If it continues growing SUV-ish, or becomes the 7-pass Exiga, Subaru would be out of the true wagon market altogether, a niche they single-handedly kept alive in the US for a while.
  • nippononlynippononly SF Bay AreaPosts: 12,693
    is, in fact, front drive with Rear Drive reactive, you get a gold star! ;-)
    Not that more than a handful of the buying public will know the difference. That has always been Subaru's challenge, to explain why their AWD is better. It never has in a way that was widely comprehended and responded to, seems to me.

    And I am with you paisan, no automatics for me, and the Matrix AWD would never be on my list. But considering that lots of people prefer automatic, that may not impact sales too much, and may in fact leave Impreza with a proper challenge on its hands...

    "Subaru would be out of the true wagon market altogether, a niche they single-handedly kept alive in the US for a while"
    Well, them and Volvo. ;-)
    I can't understand how the Legacy GT wagon didn't sell. That car was a great value. The Outback is a pale substitute. It's good for what it is intended to do, but it's just not the same.
    As a proper competititor to models like the XC70, though, it is compelling. I hope they don't turn it into some sort of low-slung crossover/SUV/God-knows-what for the next gen.

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

This discussion has been closed.