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

ateixeira

I kind of doubt it. Those aren't retail sales, and it's not like they were quoting production numbers.

-juice

varmint

As I recall, November was also a good month for the Tribeca. Whatever they're doing to move the metal, it seems to be working. Let's just hope that it doesn't cut into profits too much.

I figured this was worth posting.

http://www.detnews.com/apps/pbcs.dll/article?AID=/20060105/AUTO01/601050393/1148-

No, not Queen Latifah! Scroll down.

I seldom see Subaru's sales mentioned in comparison with the rest of the industry. So, even though these figures are based on November, they give a decent snapshot of the market. Subaru is or was closing in on VW.

varmint

I think Juice is right. The sales chart shows a row for "sales" and also a row for "dealer inventory".

Sales for December were about 20K, while dealer inventory was about 50K. Based on that, I'd say they are reporting sales, not simply reporting the number of units shipped from the factory. At least, that's my interpretation of it.

ateixeira

IIRC the Tribeca did about 2100-2200 in November, so this blows away the previous record by more than 500 units, very significant in terms of %.

-juice

robr2

I was being sarcastic regarding the B9 Tribeca Tornado edition.

rsholland

Chris Bangle, today's keynote speaker at the L.A. Show today.

http://blogs.edmunds.com/.ee8e27c

I had never thought about that before, but I think he (and Karl) are right. In terms of the Tribeca—in traffic—it just looks right to me.

Bob

ateixeira

I think so, saw a Black one under city lights and it looked right at home.

It shouldn't be photographed out in the wilderness. It looks better under the reflection of city lights to me.

-juice

ateixeira

I never nominated my pick for the most successful styling in the crossover segment, and since it officially debuted today, I present...



The Mazda CX-7.

I'm impressed because they took a vanilla Ford Edge platform, also shared with the Lincoln Aviator, and came up with something totally unique. I liked the concept, and the production model stayed remarkably true to the concept.

The results is sexy, muscular, sleek, unique, ... really I can't find one single detail wrong with it. How rare is that? I can always nit-pick something, but not here. They nailed it.

It even has the corporate look, with the 5 point grille and the muscular fender bulges that show its related to the MX-5 and RX-8.

Any how, one example of daring and attractive, which is incredibly rare.

-juice

fljoslin

I think so, saw a Black one under city lights and it looked right at home.

My three year old saw a Tribeca in full daylight and said "that is an ugly car daddy". Out of the mouths of babes.....
I am sure the less light, the better it looks. Try total darkness Then it will look as good as any other vehicle.

erics6

Yup. I agree. CX-7 is the best I've seen. Wish they hadn't fumbled on the new Miata though.

ateixeira

Babies are even more used to boxy trucks than we are. That's how their toys are. Walk in to any toy section and you'll see mostly Hummers nowadays, so that's their reference point.

No offense, but 3 year olds probably like this:



-juice

chicagodrive1

I think the tree-hugger consumer market has been sufficiently tapped by Subaru.

On a trip to Salt Lake City last year, I saw many Subarus there... seemed like the most popular make for the area.

boaz47

The Baja was a bit of a disappointment? Many said the Baja would come through but it didn't. Now we are hearing the same thing about the Tribeca. It is good that there is such hopefulness but one has to wonder if that will help this time when it didn't last time.

varmint

I agree... but... sales have been rising. Whether they will stay at the higher rate, or sink back down is anybody's guess. But rising sales are something to be hopeful about.

And I don't think it's quite fair to compare the Tribeca with the Baja. The Tribeca has a few hurdles to overcome, but it's essentially a competent vehicle. The Baja is deeply flawed in many ways.

rsholland

Bummer...

http://www.subaru-global.com/about/motorshow/ms/2006detroit/outline.html

They did show the B5-TPH hybrid concept, which was first shown at Tokyo in October, and a R1e prototype. Clearly Subaru was speaking "green" at Detroit.

Surprisingly they showed a Baja Turbo, which I find odd, if it is about to disappear, as is rumored.

Bob

jeffmc

I'm just happy they're showing the R1e here. Can't wait to hear how the fleet testing goes in Japan with TEPCO.

jeffmc

Things are continuing to go well for Subaru in Australia. '05 saw a 10th consecutive annual sales record and a record 3.6% market share! They were up 7.2% for the year there, and things look good for '06 with Tribeca expected to give a 4th-quarter sales boost.
http://www.subaru-global.com/topics/news/2006/0105.html

garandman

My WAG is that the Tribeca is mainly cannibalizing sales from the Outback..

At least.. that is my in-depth analysis of these statistics.

Which one do you own? I just bought an 06 OBW and didn't look at the Tribeca. I don't know any other OB owners who did.

I don't know any Tribeca owners. It seems to me they would cross shop Tribeca against the other blobmobiles, like Nissan Murano, Highlander, X5, Buick et al.

varmint

It seems to me they would cross shop Tribeca against the other blobmobiles, like Nissan Murano, Highlander, X5, Buick et al.

I think his point was that Subaru used to push the OB as the alternative to those vehicles. (I know they used to quote Explorer numbers in their ads.) Now, the Tribeca is taking that position. So the OB loses an angle... and probably a few buyers.

The real question is whether any losses are justified by the gains Tribeca makes.

jeffmc

I've been following the B9 Tribeca board, and I'd estimate half of the folks who are posting there came from luxury or upscale brands. BMW, Infiniti, Lexus, VW, Audi, etc. Seems to be a mix of cars and crossovers being traded in. Even if it were a wash regarding conquest sales versus sales taken from Outback, Subaru's profit margins are higher on Tribeca (especially since there have been no rebates offered yet). Tribeca also helps position the brand in the premium image Subaru wants.

kyfdx

I don't about high profit margins.... They are heavily subsidizing the leases.. People are reporting leasing $35K MSRP Tribecas for 36mo/45K for only $350/mo. with only 1st payment and security deposit upfront...

That would imply about $3500 in incentives over the life of the lease, either in below market money factors or unrealistically high residuals... Which would also explain the improved sales..

If I were in the market to lease an SUV, it would either be the Pilot or the Tribeca... great deals on both of them..

regards,
kyfdx
Host-Prices Paid Forums

andrelaplume

I think I finally saw one. Is it the half car half truck thing? It looked distinctive and cute. A bit small for a family but I'd think great for yuppies. What's wrong with it anyway?

varmint

A quick look in the Prices Paid thread suggests that invoice pricing is not a hard bargain. However, the Edmunds TMV is still about a grand over invoice (it's been that way for a while).

I would have to assume the Tribeca is more profitable than the OB on a unit to unit comparison. That's a given. But the Tribeca has a whole lotta development costs to live down. Sharing a platform with the Legacy reduces those costs, but adding a vehicle adds expenses for advertising, parts distribution, meeting regulations, and a bunch of other costs.

I guess the question is whether Tribeca sales, minus OB sales is going to be enough to cover those costs. I'd assume that it is. But I wouldn't doubt that the profit margins are very thin.

jeffmc

I looked at Edmunds' TMV pricing for a 5-pass base, 5-pass Ltd, 7-pass base, and 7-pass Ltd w/DVD & Nav. For these B9 Tribeca models the TMVs range from $1500 to $1900 over invoice. I also checked out one Outback - a top-of-the-line VDC. Edmunds lists the VDC's TMV as less than $1000 over invoice. which has an invoice more than $4000 greater than Tribeca!.

Seems pretty solid profit-wise to me. I'm sure Subaru would rather sell Tribecas all day long. Heck, they have to sell three of the Legacies to equal every Tribeca, and Tribeca outsold Legacy last month.

Agreed the Tribeca has development costs to overcome, but so does any new model. Production of the B9 Tribeca for foreign markets will help offset this. Just being in another segment keeps Subaru on more folks' shopping list.

robr2

This means Subaru's making over $500 more per sale even on the lowest 5-pass Tribecas than on the Outback VDC, which has an invoice more than $4000 greater than Tribeca!

Those numbers are for Subaru dealers - not Subaru itself.

varmint

This means Subaru's making over $500 more per sale even on the lowest 5-pass Tribecas than on the Outback VDC...

Or it means Edmunds has more up to date information for one of these vehicles vs the other.

I don't doubt that Subaru would be making more profit per vehicle on the Tribeca. The question is whether they make enough profit to A) cover platform costs, and cover lost sales of the Outback/Legacy.

ateixeira

Baja never came close to forecasts, I think it sold about 1/4 of what they expected.

People didn't want a pickup with a tiny bed and a cramped interior for just 4 people.

Tribeca sales in December very nearly met the monthly forecasts. That plus the forecasts were higher to begin with. And it sells at a much higher price, too. It's Subaru's 3rd best-selling model now, surprisingly.

Outback actually gave up some sales to the Legacy GT, specifically the sedan model, which is way up. It used to be about 3 to 1 ratio (Outback vs. Legacy), but now it's 2 to 1. Also, I read that sedan sales are up 27%.

My conclusion - people are discovering the Legacy GT as a sleeper sports sedan, so the Outback has sacrificed a few sales.

-juice

dstew1

Outback actually gave up some sales to the Legacy GT, specifically the sedan model, which is way up. It used to be about 3 to 1 ratio (Outback vs. Legacy), but now it's 2 to 1. Also, I read that sedan sales are up 27%.

My conclusion - people are discovering the Legacy GT as a sleeper sports sedan, so the Outback has sacrificed a few sales.

Personally I can't imagine the success of the LGT sedan as really having any impact on Outback sales. There may be a few people who cross shop sturdy, SUV-substitute wagons with speedy sports sedans, but I can't imagine it being more than a handful (literally 10-20 across the country). Despite all of their obvious similarities, they serve entirely different purposes. I could be wrong, though.

Doug

robr2

Personally I can't imagine the success of the LGT sedan as really having any impact on Outback sales. There may be a few people who cross shop sturdy, SUV-substitute wagons with speedy sports sedans, but I can't imagine it being more than a handful (literally 10-20 across the country). Despite all of their obvious similarities, they serve entirely different purposes. I could be wrong, though.

I agree. IMHO, Outback sales are down because there are so many "crossover" alternatives out there. The Outback may have created the market but it no longer dominates it.

varmint

"It's Subaru's 3rd best-selling model now, surprisingly."

LOL I agree with your point, but I thought this was kinda funny. It may be Subaru's 3rd best selling vehicle, but it's also their 3rd worst.

ateixeira

It's still Subaru's best seller, BTW.

But we see a *LOT* of people that come to Edmunds that like it, but wish for something that handles a little better - hence the GT recommendation heard often.

So I agree it's a different alternative, but it saves people from leaving the brand entirely.

Go to the Tribeca thread, I think there are more conquest sales than there are people moving up. In fact none of the old "regulars" from the Subaru Crew has bought a Tribeca yet.

I guess I'd be the first if we hadn't bought a beach condo recently.

-juice

ateixeira

Depends on how you break it down, but it outsells the Impreza, the Legacy (I consider it a seperate model from the OB), the Baja, and the Outback Sport.

-juice

jeffmc

You're right. I guess I'm speaking of "Subaru" as a brand, a collective of everything associated with producing and selling the cars, rather than specifically SOA or FHI. If the dealers are making healthy profits on each vehicle, you'd think the manufacturer was, too, though I suppose there's no absolute guarantee.

ateixeira

Let's not underestimate the importance of happy dealerships. They are the face of the company to the customer, and they'll stick with brands that bring them profits.

-juice

zman3

Personally I can't imagine the success of the LGT sedan as really having any impact on Outback sales. There may be a few people who cross shop sturdy, SUV-substitute wagons with speedy sports sedans, but I can't imagine it being more than a handful (literally 10-20 across the country). Despite all of their obvious similarities, they serve entirely different purposes. I could be wrong, though.

I am apparently one of the 10-20 then. I live in Minnesota and wanted to stick with AWD. I was torn between the H6 and the turbo 4. I ended up picking the H6 which ruled out the Legacy. If I had picked the turbo I would probably have chosen the Legacy to save a few bucks. I don't go offroad with my OB so the ground clearance difference was not an issue for me.

Karl

dstew1

Were you looking at the LGT sedan or wagon? Did you buy the H6 wagon or sedan?

I can understand cross shopping the two wagons, but not a sports sedan and utlity wagon based simply on intended usage. However if you factored in availability of a certain engine type, then that would definitely weigh heavily on your ultimate decision.

Doug

zman3

I cross shopped the whole gamut. I looked at the H6 OB and the LGT sedan and wagon. All I knew is that I did not want an NA 2.5L engine with automatic ever again. I also did not want a manual transmission.

I decided I wanted an H6 so I bought the OB. I don't like the OB sedan so I got the wagon.

If I had bought the LGT I probably would have actually bought the sedan. I don't necessarily need the wagon space since my wife drives an Expedition. But for long term reliability I stuck with the H6 since I plan on driving the car for 7-8 years and then handing it off to my kids.

Karl

ateixeira

Though you'd never know it if you didn't see one of the 7 made to date. :P

Funny thing is a close friend at work inherited one from her dad, the original '97 SUS. What a dumb acronym, Sport Utility Sedan? :confuse:

Any how, stop thinking like a normal person. LOL

Imagine you're in New England and you get 85 feet of snow per year, you want a Legacy but need more ground clearance than it offers, so you get an Outback. Happens a *LOT*, they are cross-shopped all the time.

-juice

rsholland

This is the Reuters report about the annual New Year's message from Kyoji Takenaka, FHI's president, from:

http://today.reuters.co.uk/news/new...UBARU-SALES.xml.

FHI's production plans for this year are posted at:

http://www.fhi.co.jp/english/news/p...6/06_01_13e.pdf

Bob

nippononly

So sales were down in the home market, but that decrease was compensated for by a rise in sales elsewhere?

And they hope for 211,000 sales in the U.S. this year.

I am waiting to hear official plans for the Toyota that will be built at SIA.

ateixeira

That won't happen, IMO. No new models, NAIAS press conference was a dud, no concepts or anything to draw attention to the brand.

I predict it'll be flat, about 197k, same as '05. They won't grow unless they do it with incentives.

-juice

varmint

For some reason parts of the links got clipped.

FHI.co.jp

Reuters

It looks to me like their plans for the UK are more aggressive than North America.

I think sales in the US should grow maybe 4-6K units. The Tribeca will be on sale for a full year vs 8 or 9 months in 2005. Unless sales of the Forester sag as the competition increases and sales slow when info about the next gen gets out.

jeffmc

Darn, no mini cars planned to be sold outside of Japan.

jeffmc

Reuters: "Takenaka said the company would introduce a van-type fourth minivehicle this year."

I guess that's what the minivan rumor was based on. Sounds like another Japan-only model. :mad:

jeffmc

"I am waiting to hear official plans for the Toyota that will be built at SIA."

Thought I read that it will be the Camry built at SIA in 2007. Let's see if I can dig up a link...

Looks like it's still unofficial, but here ya go:
http://motorway.marinij.com/Stories/0,1413,308~32224~3155632,00.html

nippononly

they just can't build enough Camrys, huh? ;-)

I realize that Tribeca sales have been ramping up every month for the last few, but I don't think it can really maintain that momentum for an entire CY 2006. Is it still 18 months until we get close to a revamped Impreza/WRX? With Forester a year later than that? or both around the same time?

ateixeira

The Tribeca will pick up the slack for the older models that are no longer fresh. That's why I think they'll be about flat for 06.

JDM needs a van to replace the Opel Zafira/Subaru Traviq deal with GM that is no longer. I'd love to see something like a Mazda5 come here.

Mazda5 is on my short list, but they didn't bring the AWD option that Mazda does offer in Japan.

-juice

nippononly

decided to bring a microvan to the U.S. (a good idea, it seems, from the sales pace of the Mazda5), can they PLEASE borrow the Mazda styling team to draw it? Please? :-)

ateixeira

Even though I really like it, they're not bringing the best stuff from the JDM model - no power doors, no AWD, no middle seat for the 2nd row, just for starters.

And it's still exceeding sales forecasts (admittedly modest, but it proves there is a market).

-juice

varmint

In this case, I don't think the Mazda needs power doors. They glide open and closed very nicely. It's not hands-free, but you can operate them with a pinky finger.

A small van would be a nice addition. Subaru's naturally aspirated 2.5L would be a good match for a vehicle that size. My concern would be the addition of AWD and it's negative impact on fuel economy. People rave about the Mazda5's fuel economy, but it's really no better than most small SUVs. Subaru would have to do better than Mazda on that score.