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Subaru's fortunes sinking - can they turn it around?
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Look at Daihatsu - Toyota has a controlling share of that company and has let them go their way all these years without messing around a lot in their affairs. Why? Because Daihatsu makes the best minicars around, and continues to sell well. Profits = little interference from Toyota.
Actually, doesn't Subaru make minicars for the home market? I wonder if this will lead to a little "in-house" rivalry.
One thing Toyota does VERY well, which Subaru does poorly IMO, is PR. Subaru should be trading on its rally experience since it is becoming the "speed" company in its transformation from its "granola" image of old. It should have memorable ads, not cash rebates. It should have a stronger rep. Toyota can help it with these things.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
They sold 1867 last month, which is a little down from the month before. I attribute that more to the $3.00 + gas, more than to anything else.They sold more Tribecas than they did Legacy (1859) and Impreza sedans (1629), Impreza wagons (1153)), and certainly more than the Baja (558) last month.
The Forester and Legacy/Outback wagons sold more than the Tribeca, which is expected.
Bob
Toyota knows in what bad financial shape GM is in. It might do this as a favor, and turn around and sell its Subaru stake.
If Toy keeps the stake, doubtlessly Subaru will prosper!
Something like Audi's rally/ski jump slope commercials. They do appear to be lost in PR/marketing. Lance's commercials were quite good, than it came stupid Think-Feel-Drive and ridiculous "Dust in the wind" played over and over, and over.
2018 430i Gran Coupe
Someone mentioned turning around and selling the stake. If what I'm reading about Toyota seeking the batteries is true, I doubt Toyota would making this move just to help out GM.
Nippon - I have to disagree with you about the "speed" image. As impressive as the WRX is, it's still very much a niche vehicle. Any variations (like the Forester XT) are also going to be niche vehicles when compared with the bulk of their sales. On the other hand, the granola folks have been Subaru's base for the past 10 years. They need to keep the tree-huggers around. If anything, Subaru could use a hybrid to make them even more happy.
Bob - Thanks for the September sales report. But I thinking more along the lines of how many Tribecas they sold versus how many they wanted/expected to sell. I opted to get off my duff and research it myself. I found this. According to the posts immediately following, Subaru needed to sell 22K units of the Tribeca over six months. On average, that would be about 3.6K units each month.
One bad month due to high gas prices isn't going to hurt, but how often have they met that goal in the recent past? Or are there newer figures regarding their sales expectations? Thanks.
Bob
I think "granola" as an image has faded right out of sight at Subaru. What has it been replaced with, if not "speed"? See, this is what Toyota's hyperactive PR department could help with, helping Subaru find its image, then focusing it tightly and getting it out there so everybody knows. :-)
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Toyota have several WRC title before Subaru got one. Remember Celica GT4 (All-Trac). Yes, Subaru has a good AWD system but Toyota can make one if they want to.Its safe to say that Toyota has richer rally experience than Subaru.
But there's no reason to think Subaru's future consists of Suba-yotas.
giantkiller: I am not the most well-versed in rallying, but I have NEVER heard the Toyota name associated with rally trophies, whereas Subaru had a bunch of wins and has only recently slipped (the last couple of years).
I agree that any edge Subaru has in AWD is small at this point, vs Toyota.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Subaru isn't doing so well now in factory competition. There are something like five or six factory teams (Ford, Mitsubishi, Peugeot, Citroen, Subaru and Toyota I think - it varies from year to year), Subaru is occupying 3-4-5 place, haven't won for quite some time now
2018 430i Gran Coupe
2018 430i Gran Coupe
A translation from Asahi Shimbun (Japanese newspaper):
Toyota and FHI are studying the following plan:
• For its hybrid car that is under development, FHI will source major parts from Toyota.
• An engineer from FHI will take part in Toyota's production and development.
• In the future, the two companies would like to embark on jointly developing automobiles.
• Subaru cars will not be sold through Toyota dealerships.
• No executives from Toyota will be dispatched to FHI.
• If things move swiftly, a formal agreement may be signed by the end of this year.
• For the hybrid Legacy that is scheduled for release in 2007, FHI will discontinue sourcing main parts, such as electric motors, from private company development, and instead will source those parts from Toyota.
• The plan is to manufacture Toyota vehicles at the SIA plant, which currently has a low operating ratio.
• Toyota is experiencing favorable sales in North America, where local production cannot catch up to demand, and thus exports from Japan have increased.
• Toyota sees production, starting up a factory line, and development as the 3 areas that will be the driving force being the business tie-up.
• Toyota has been preparing itself for worldwide production increases, but lacks experienced engineers.
• Toyota management's anticipation: "We can apply top-level engineers from FHI to our global strategy"
• On the other hand, both companies will respect each other's management independence, including the brands.
• "Subaru" and "Toyota/Lexus" will be distinctly defined and joint sales will not be carried out.
• Toyota will avoid sending an executive to FHI
• There are no plans to mount FHI's unique horizontally opposed engine in any Toyota vehicles.
• In the future, however, using both companies' technology, a vehicle may be jointly developed, as increasing synergy is in the outlook.
• Toyota plans to acquire the 8.7% share in FHI on October 12.
Bob
So, Toyota is buying a nice factory (probably getting a bargain too), and an experieinced labor pool.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
http://www.asahi.com/english/Herald-asahi/TKY200510070199.html
You can visit www.tte.de to know more about the rallying heritage of Toyota.
As for GM - wow! They are going to lose $0.7 to 0.8 billion on the deal? They really know how to pick 'em, don't they? Why would they ever have thought they could share much with Subaru? The two companies are so enormously different.
Interesting: Toyota's public position is that it has a shortage of qualified engineers, which is one way it can benefit from its alliance with Subaru. Who knew that Toyota was short of engineers?
SIA has always had a good record for build quality, so it will be good if Toyota can employ some of its underutilized production capacity.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
As I felt and according to anaylysts in this article:
"They dismiss Toyota's praise of Subaru's all-wheel drive and horizontally opposed boxer engine technology. Toyota doesn't need the former, while the latter is incompatible with Toyota's product lineup, they say."
"If no one is really sponsoring Fuji Heavy's restructuring, they have a perception risk," analysts Nakanishi said. "People would worry they will go bankrupt."
Of course, getting production capacity on the cheap in the US and a captive customer/supplier in Fuji isn't the worst thing either.
And that they are able to accomplish so much and dominate an industry while lacking engineers.
A while back Honda switched from developing engines that rotate counter-clockwise to designs which rotate the same way as the rest of the industry. That way they could sell engines to other manufactures (capitalizing on one of their strengths). One of the articles above suggests that Subaru has been unwilling to make changes to make their strong suit compatible with others. Although Toyota supposedly isn't interested in Subaru's drivetrains, it will be interesting to see if that changes in the future, and how Subaru handles it if it happens.
Now, with the alliance with Toyota, I could see Subaru and Toyota doing a joint-venture trucklet to be sold by Toyota (perhaps as a Scion?) to take on the Jeep Wrangler, using the 2.5 boxer engine (N/A and turbo), and combined with Subaru's rally experience and Toyota's truck expertise, a beefier suspension. Maybe even offer a third truck line for Toyota, using Subaru-based running gear, to better address the Ridgeline than the Tacoma can? I'm sure there could be other such applications too, but those are the first ones that comes to mind.
Bob
I think there is a market for an out-of-the-box thinking type of truck, that even the FJ Cruiser hasn't addressed. That vehicle is more of an answer to the Nissan Xterra, and less so the Wrangler. I'm really thinking of something that would appeal to those who like features of the Ridgeline (IFS/IRS, full-time AWD w/dual range—which Subaru offers in other markets, unique packaging and features, etc.)
I don't think the Tacoma does that. People who buy Tacomas and Tundras are still very much "traditional" truck buyers. I think there could be an opportunity to exploit and build upon the ideas put forth by the Honda Ridgeline. Subaru and Toyota could do this together. Maybe even sell it at both dealers?
Bob
I agree, Bob. Subaru would have no unique selling points remaining. (Frameless windows & Zapatinas looks just won't cut it on their own.) Small car companies either need to sell cheap to grow market share (Hyundai), or need to be unique. If two cars are equal, what incentive is there for folks to risk buying from the smaller, "unknown" brand instead of the large brand that their neighbors drive, that has dealerships all over, and that they read about in the press regularly?
Bob - I disagree on the latter. The boxer engine doesn't mean squat to anybody except the motoring enthusiast. I venture to say that even many Subaru owners don't care about the boxer engine. What sells Subaru is AWD and the buying public doesn't care if it's symetrical or not.
My understading is that the boxer is loud, less efficient and requires more maintenance. Few people are willing to put up with those in order to have a boxer engine. Quirkiness has little place in a mass market product.
Now Toyota is a smart company. If their intent really is to get something out of this investment, then they will. Perhaps having Subaru sold as part of the Toyota branding machine, it'll improve sales because of the quality mystique associated with it. Subaru enthusiasts may consider the brand dead but it may now appeal to a greater market.
I for one see nothing wrong with mating a nice I4 or V6 (especially a Toyota motor) with the Subaru AWD configuration. The reliability of a Toyota with the AWD reputation of Subaru would be a winner IMHO.
It means EVERYTHING to Subie owners. Lose that feature, and you've lost many current Subaru owners. It's part of the brand's DNA. The only thing worse would be to drop the AWD.
My understading is that the boxer is loud, less efficient and requires more maintenance.
Not the least bit true.
Bob
If I understood the article correctly, Subaru was refusing to share components unless the competitor used the whole drivetrain. For example, GM could not use the AWD system for, say... the Malibu Maxx... unless the vehicle also used their symmetrical, in-line design.
If we are to believe that the symmetrical nature of Subaru's cars is so very important to the effectiveness of their designs, then this Maxx would not have been competitive with the Soobs, and Subaru would still get paid for it. Money for nothing!
Instead, Subaru got squat.
Now, if GM had done what Subaru wanted, a car like this fictitious Maxx might've been every bit as good as a Legacy, and then Subaru would lose their edge. Given that GM has a much larger retail network and an established presence in all 50 states, I don't think it's a reach to say that GM would have the advantage in marketing. Look at how much better the Escape sells than the Tribute for an example of how effective that advantage can be.
Real wheeling requires 4-lo with lockers. Both for functional and marketing reasons. AWD is far superior on road, but when you get into technical terrain a 4X4 system is necessary to get the job done. I mention marketing because there is already a large OEM and aftermarket industry for the old-style 4X4 systems. Wheelers know what's out there and how to work on such systems. It would be very difficult trying to get them to change their ways.
To Subaru enthusiasts such as yourself - Yes; typical owners - No. I think they'd lose a few current customers due to a change in engine design. I'd venture to guess that the majority of Subaru owners bought one because of AWD - not the Boxer engine. Not all Subaru owners are enthusiasts. Most Subaru owners I personally know bought theirs because of AWD - I doubt they remember the literature or sales person telling them the engine was a boxer. IMHO, if Subaru did put in an I4 or V6 very few people would care.
As for loud, less efficient, and high maintenance - I state that based on what some people call the boxer growl (not always a bad thing) and Subaru's own maintenance requirements - they seem rather archiac compared to some other manufacturers - 30K or 60K plug changes and 3.5K oil changes (H6). Less efficient, I take back - I based that on MPG but that's due to AWD.
If Subaru and Toyota want to do joint venture projects of some sort, then parts would likely be shared, as would resources.
Varmint:
I think it's too early to say what this all means. Toyota and Subaru need to work this out. From my standpoint, I'd be much more willing to share parts with Toyota than GM. I see them (Toyota and Subaru) much more of being kindred spirits than GM and Subaru.
Rob:
As I've said countless times, boxer engines are part of Subaru's identity. It's what they're known for. Lose that, or AWD, and you lose their identity. Next stop: the grave.
BTW, I've never heard of anyone complain of a Subie H-6 boxer being noisy. I've driven a number of them, and they are very quiet and refined powerplants. I don't think there's anything inherently noisier about a boxer engine than any other type of engine. A lot of it has to do with vehicle soundproofing. Keep in mind Subarus, until recently were rather crude vehicles in terms of refinement, and that includes soundproofing. I don't think anyone would complain of boxer growl on a new N/A Legacy or Outback H-4/H-6; not so sure about turbos, but my recollection is they are not noisy.
Bob
Also, like Porsche and Harley Davidson, Subaru has a rabid fan base. This is especially true of the performance-oriented Impreza. Lose the boxer engine and you've lost most of your Impreza customers. Lose most of your Impreza customers, and , well... you can guess the rest.
Bob
Bob - the only part I agree is that boxer engines are part of the identity for those who know and care about such things. But the typical car buyer doesn't. That little tidbit of information wouldn't sway most buyers if the sales rep brought it up as a feature. Heck, while I was shopping recently I went to 2 different Subaru dealers. Boxer engine and why it's "better" was ever mentioned. AWD and performance was what was emphasized. Yes, Subie enthusiasts would mourn the passing of the boxer, not the market in general.
As for losing AWD - yes that would kill the brand. That's what people recognize as what differentiates it - not the boxer engine.
Go out and ask 10 common people who are not enthusiats that if Subaru were to replace the boxer engine with another design, would it influence their purchase decision. I'd say 90% would look at you cross-eyed and not care.
To you, to juice, to colin et al - it would be devasting. And I'm not saying that's bad - it's just not representative of the rest of the world.
To Mr and Mrs Car Buyer, it wouldn't mean a thing.
Bob
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
Bob
And I've been in marketing for almost 20 years.
I don't believe that AWD, the boxer engine, and Subaru go hand in hand to the majority of the potential market. Subaru and AWD - yes but not the boxer.
The boxer engine and AWD go hand-and-hand are core brand identifiers. Lose either one and the brand will die.
Perhaps Subaru marketing has convinced itself and the enthusiast community of that. I'm not convinced the general market would care.
Do you honestly think that if Subaru went away from the boxer engine (keeping everything else the same) that the brand would disappear?
I just don't understand why trying to sell parts of Subaru's drivetrain would endanger their signature technology, but foisting the entire drivetrain on a business partner would not.
Yes. Sooner or later it will disappear, as it will become just another faceless brand, with little or nothing unique to offer it's customers. You can't say AWD will be it savior, as just about everyone will be offering that feature in due time.
There are a dozen or so car companies out there who would die to have Subaru's brand ID attributes. There is no other company in the world who can claim to be 99% AWD—and have 99% of their models equipped with boxer engines. The only non-AWD and/or non-boxer Subarus are sold in Japan. The Justy is a non-boxer and sells in tiny numbers in a few European markets. There is heritage and brand equity there that took Subaru decades to build. FHI would be out of their minds to throw all that away by starting to offer non-boxer engines as part of their world market.
Bob
Whatever Subaru does, they have to extremely careful that they not harm their core image. They are a car company known to have spunk, attitude, and that they march to their own drummer. That aspect has been key to their success over the years. The boxer engine and AWD—together, not separately—have been a big part of that process of image-building.
Frankly, I don't have a problem if they offer some of their technology to Toyota. I mentioned the possibe truck scenario before. I could also see a Lexus Boxster fighter using a mid-engined boxer 6 with the (Euro) Spec B 6-speed transmission.
Bob
If the boxer design is so important and superior, why do only 2 seemingly niche companies care so much about it?
If the boxer design is so important and superior, why is Subaru still a small niche manufacturer.
Is Subaru afraid to tell the world "Look at us - look at the boxer - look why it's better"?
It may be a core identifier but many companies have gone away by resting on their core identifiers - Polaroid, Kodak, Digital, et al.
I don't expect AWD to be its savior - you're absoulutely right there. But I maintain that the boxer engine does not make a for a compelling reason for the general public to buy a Subaru. It may differentiate it but it's not a major reason to buy.
Yes, the 2.0 WRX automatic is not a good marriage. That's why you see so few of them. Not so with the new 2.5 '06 WRX. It's got much more power down low below 3000 rpm and is automatic-friendly.
Bob
Why is it so good? Lower center of gravity, which promotes excellent handling. So, yes, there are very real benefits to that engine design. Have you ever driven a boxer-engined Subie that didn't handle well?
The boxer engine is not better because it's different. It better because it makes the car perform (handle!) better while driving it.
Bob