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

anythngbutgm

why I got my Impreza for $16,500 (MSRP 19,260). Now that you mention it, the dealer I bought my car from only had one new Tribeca on the lot.

ateixeira

Perhaps. I'm having trouble finding CPO Tribecas in the Mid-Atlantic.

I may have to drive up to New Hampshire, unless I can work out a dealer trade of some kind.

Bill Kolb Subaru seems to have them all. They're the only dealer in the entire east that has a reasonable selection of used Tribecas.

-juice

subearu

still no Legacy GT selection at my local dealer. Next nearest has an SE. A bigger dealer near Chicago has a couple GT's.

-Brian

dino001

There is very little "regular" GTs and no Outback XTs around here, but it seems all dealers got their hands on Spec B - probably in hope of hyping them to someone. It was same with STI Ltd. - everybody around had one unit. Those they sold pretty quickly - Spec B's go much slower.

ateixeira

I love 'em, they're such sleepers.

-juice

dino001

So do I, yet if they're not available then what's the point? :lemon:

ateixeira

I guess the point is they have to rethink their production and distribution strategy.

-juice

jeffmc

Thought I heard SIA had already stopped assembling '07 Tribecas to reduce excess inventory for the launch of the '08 in several months. If there are still '06s around somewhere (and there must be, if Subaru's still offering rebates/incentives on them), I think it's a smart move, otherwise they're really risking a failed re-launch of the model. They don't want to have to keep discounting so heavily, and this is the time to break out of that cycle.

nippononly

has begun playing it safe in recent years, and these days you can pretty much count on finding ONLY WRXs and Outbacks in stock over there...with a Forester or two thrown into the mix.

ateixeira

Could be, that would also explain why certain dealers no longer have enough of them.

-juice

mayberryguy

Thought I heard SIA had already stopped assembling '07 Tribecas to reduce excess inventory for the launch of the '08 in several months.

Not true. They are still assembling '07 Tribeca until end of March and then will switch to the '08's. I'm guessing they are trying to lean out the inventory in anticipation of the '08 launch.

ateixeira

There you are mayberryguy, long time no see.

Any peeks at the 08s yet? Production starts that early, eh? When will they be in dealers?

Wife wants the new vehicle by summer, so I'm stalling as much as I can so I can at least see the 08s.

-juice

jeffmc

Thanks for the correction, mayberryguy!

nippononly

Can it be that Subaru has yet ANOTHER new plan for the U.S.? This one is a 4-year plan, marking its major distinction from previous plans which were FIVE-year plans of course! :-P

http://www.autoweek.com/apps/pbcs.dll/article?AID=/20070306/FREE/70305003/1528/F- REE

They say they're bringing the diesels in the next few years, they say they WILL develop a new compact for the U.S. market, and they hope to achieve sales parity between the U.S. and Japan, a much more modest goal than the previous plans, from which they admit they fell short.

Oh, and they are explicitly abandoning the whole "premium brand" idea, thank goodness. That was going nowhere. They are also giving up the whole push into the Sun Belt, which apparently also went nowhere. What a shock, AWD is a pretty hard sell in places where it never snows and almost never rains.

They want 625 dealers by 2010 or something, yet I would question big efforts at expanding the dealer base - Toyota makes ten times the sales annually from twice the number of dealers, not to mention Toyota dealers are much more evenly distributed across the country, rather than concentrating only in northern states like Subaru. Rather than expand the NUMBER of dealers, I would like to see them focus on supporting dealer efforts to become stand-alone Subaru stores, and improve their facilities.

But whatever, it sounds like they now have a plan more likely to bear fruit than anything in the past. They are going to do like the most successful Japanese brands, by focusing on North America-specific design, and by trying to anticipate trends here. That's a good thing.

dino001

I think they need to do both. There are partf of the country where dealers are not in sight. Nobody would buy a Subaru if they had to drive 100 miles for a warranty service. Of course, being part of Dodge/Kia/Chevy megastores is not helping, either. Here in larger Tampa Bay we have one dedicated Subaru dealer (who also sells Alfa Romeo parts, as they used to be their dealer) and others are parts of the multi-brand retailers. Three are parts of upscale dealers (BMW/VW/Audi/Hummer/Porche/MB etc. other two part non-lux brands (Jeep/Chrysler). So the mix is actually pretty decent. All those I have been are quite nice people - usually low-pressure focus on the product rather than "would you buy it today", but deals are quite decent as they are not in such demand, as you may imagine. I would probably get a similar deal in any of them.

All their service departments offer loaners for scheduled maintenance - the one I go to has four of them, so it's definitely better to call a week or so in advance. I got so spoiled that any time I go to those "regular" brands, I feel like taking a long hot shower. It's a day and night difference. I can trully say Subaru here is already "upscale-minus" brand experience - usually clusters itself with VW and is surrounded by more classy brands. It's become their "little sister".

I wish they had one dealer more closer to my home, but it's not really that necessary.

It would be regrettable if they withdrew from the "premium" talk totally. I still want them to give me HID lamps, "free" loaner, and nice neigborhood. Their aim was just completely misplaced - instead of targetting Volvo, Saab, Acura they tried to compare themselves with BMW. I don't want them to become another Toyota chaser. That would be a complete disaster IMHO.

ateixeira

Oddly, Automotive News came out with a couple of articles on the subject, and Autoweek is owned by the same parent company (H-F Publishing).

Only they reported slightly different details. They said Subaru was going to add an office in Cali and put more focus on the Sun Belt. :confuse:

SoA just got a new CEO, but he's from corporate (FHI) so I don't expect big changes. I was actually disappointed that they didn't appoint an american for the job. The new guy did work at SoA for a couple of years, but still basically from FHI, and not a "local".

On one hand they say they will put more emphasis on the US market, then they put a Japanese FHI guy in charge of the US. Sounds like same 'ol, same 'ol to me. :mad:

You want to shake up the corporate culture? Put in an american, born and raised here, make it a female while you're at it. Patti for CEO! :shades:

-juice

dino001

Put in an american, born and raised here, make it a female while

There may be something in it - just not for me. As far as I'm concerned, the CEO may be an alien from Mars, as long as they give me more "Euro-flavor" with Nippon reliability. I'm afraid that female American would do just the opposite. She will put them on a straight path to Avalon and Camry clones with stars on the grill. Not for me...

I'm driving a Forester loaner right now - a pleasant car - nice touches here and there, but clearly built with woman in mind. Hard to explain, exactly why, but light steering and certain esthetic aspects come in mind. Nothing wrong with it - just not my type of vehicle.

I remember when I dropped my '03 WRX first time for the oil change - I was the only male below 35 there. All others were 40+ women with their Outbacks. Of course now it's more balanced.

ateixeira

You're right, though. Low hip point makes for easier entry for shorter people, and females are shorter than males on average. Generally speaking it's very "user-friendly" vs. being macho for the sake of appearing tough. Earlier Subaru actually won an award from a group that represents people with disabilities for this type of thoughtfullness.

Any how, the new direction is supposed to be about giving the customer what they want, vs. the engineering focused past, and I have mixed feelings about that.

I guess I'm OK with that as long as they consider enthusiasts as their customers. I don't want to see Avalon and Camry clones, either.

-juice

ateixeira

I'm very impressed, looks like they totally went their own way, with no help at all from Toyota. It's all Subaru:

http://blogs.edmunds.com/.ee98ead/0

I'm even a bit shocked. :shades:

-juice

varmint

Looks like a better plan than the last few.

I'm especially keen on the notion of a diesel engine. I'll wait to be impressed until they give us something more than display mock-up, but having one in their line-up makes good sense. Here in the US, Subaru buyers tend toward those willing to try things a little differently. So, getting core buyers to make the mental switch from petrol to diesel might be easier than for other companies. It's too bad Subaru didn't get into the hybrid race when it first started. They have the right audience for that sort of thing.

My understanding of the sub belt comment was that Subaru will be "watching" SoCal for trends. No mention was made as to whether those might be styling trends, popular features, or emerging niches. That's not quite the same thing as targeting the entire sun belt for expansion. My take was that Subaru will be mining for influences to improve the cars sold to the rest of the nation (which tends to follow SoCal fashion).

ateixeira

Given they are niche specialists, having the most fuel efficient AWD models will allow them to stand out again. Everyone has AWD. A few offer diesel. But not combined.

I don't see VW doing a TDI 4Motion in this country any time soon. Well, they have the Touareg TDI, but Subaru would have the only diesel AWD under $70 grand.

-juice

dino001

The Sunbelt talk is ever-lasting. I just recently talked with my local dealer in Tampa and he confirmed all over that they talk the talk all the time, but seem to be clueless how to walk the walk. I shared with him my thoughts about AWD being a performance feature in Sunbelt and how it could be played with targetted WRX/GT/XT commercials and he generally aggred. They say about low demand over and over but make no attempts to even create the awareness amongst those who would be natural customers for those cars given performance and price range.

When new Legacy came up both C&D and Automobile made the comparison tests of GT with the ones they thought were relevant: TSX, S40, (old) A4. I would add 9-3 and perhaps Accord and Altima V6 to the mix. Did we hear anything on the air? No. All I saw were "Dust in the wind" and Outback in the mountains commercials. And in magazines some silly comparisons of Outback to Porche Boxter, BMW 325 and Ford Explorer :sick:

I recently saw pretty funny commercial with a couple shopping for Legacy GT where the salesman was speaking to the wife about safety and wrote down "Faster than Boxter" to the guy. Funny, but that Boxter is misplaced again and shown too short. Again, poor execution and misplaced chips. No 4 year plan will help if such blunders continue.

ateixeira

I agree with you, the ads have to be regional. What works in New England won't work in Florida, Texas, or SoCal. Not even close.

-juice

nippononly

is that there is maybe 10% of the market actually making performance a very high priority in the purchase decision, and out of those buyers there are maybe 10% you could convince that AWD is a major enhancer of sporting capability (rather than just the typical power it up, lower it down, give it wide tires and RWD approach to performance enhancement). That's 1% of all buyers that would absorb claims of AWD's sport appeal and would prioritize sport in their purchase. After that, those 1% of buyers have many great sport choices to select from - the market is overstuffed with "sport" models of all shapes and sizes.

That's the reason Subie will never make it further out of the Snow Belt than it already is, IMHO. But IN those northern states, Subaru could do a lot to enhance sales, especially by improving the dealer network and the cars' fuel economy. Just one opinion. They should do it now while AWD is still a relative rarity in family transport, outside of crossovers and SUVs. Later on they will have the added challenge of making the Outback and Forester stand out in a sea of crossovers, as well as making the Legacy and Impreza stand out in other ways. I am not sure what those ways will be - they are already very competitive cars, but the problem in future is that competing brands will be offering FWD trims of their cars that are less expensive than the competing Subaru, in addition to AWD trims that are similar in price.

As far as what this new guy had to say about Subaru's new plan, we only saw those challenges addressed in the most broad and vague of fashions, seems to me. Getting the diesel (and hopefully a previously mentioned potential hybrid as well?) will be a good step to take in the short term.

ateixeira

You're probably right about the numbers, but marketing them as sporty creates a halo over your lineup that has worked wonderfully for BMW.

In ads, they show the M3 coupe slicing up the 'ring, but people go out and buy automatic 325i sedans.

If the Subaru brand is perceived as sporty, it would help their sales in trendy places like Florida and SoCal.

The risk is you'll appeal to the type of folks that will drive insurance rates through the roof. :sick:

Subaru caught a lot of flack for the Radar Love WRX ad.

varmint

I think you might overestimate the power of the "comparison ad". They are a double-edged blade.

Even if the message is good, a comparison ad essentially prods the viewer to drive the competitor. A straight ad focuses the attention on only one product. Comparison ads can also lend a wannabe image to brand if they are used too often.

Subaru has used such ads in the past. I recall dogs preferring Subaru's, Paul Hogan's lady sidekick escaping from goons in a CR-V while driving a Forester, etc.

varmint

What works for BMW and Porsche will not work for every brand. As you've said yourself, Subaru buyers tend to be practical people. That's not exactly the same clientèle you'll find at a BMW dealership.

Not that a sporty image is a bad thing. But I think Nippon has a point about that particular marketing trick getting close to saturation.

ateixeira

Subaru buyers tend to be practical people

Yeah, but there are none of those people in the south.

They have a clean sheet of paper, pretty much. They can create a strategy from the ground up.

-juice

varmint

LOL Are you sure you've got sufficient latitude to be posting stuff like that?

dino001

Performance is low priority for people who buy 4-cyl Accord or Camry. But ask anyone who considered Acura TSX, Volvo S40 T5, or Saab Aero if performance was low on their list. And those are people who would be natural market for GT/XT line. It's low volume, indeed - but within that low volume the brand awareness is next to none - and that is a big problem.

Performance is also exactly how Altima buyers are lured to showrooms. Every Altima owner knows that 3.5 is faster than Accord V6 or Camry V6. Whether they bought 3.5 or 2.5 is secondary - they know they associate with "fastest" midsize at that price range, even if their cost 8 grand less and is not as fast. Performance creates buzz. That's something people talk about and something brings people in. The foot traffic may or may not convert to sales - it depends on pricing and alternatives. There is no reason for someone considering Altima 3.5 or Accord V6 not to check Legacy GT, even if it's too small. Just tell them such vehicle exists!

At this moment there is ZERO awareness about Legacy GT/Outback XT performance. There is good awareness about WRX, but that does not bring potential Legacy buyers - it's just different demographics.

ateixeira

Before the WRX came around, the Subaru Crew had one single member from Florida, who owned 2 Subarus.

We joked that he owned both the Subies in Florida!

Any how, they can adopt a regional strategy. Use what has worked in the Snow Belt for so long, and offer something completely different down south. Ads showing a Forester plow through piles of snow simply will not sell cars there.

I'm not saying that I know what will, but at least they can start from a clean sheet of paper.

Subaru tried putting Bajas on the beach in Cali, supplying them to some of the life guards there. It was probably too small for those duties (we won't mention the donut spare), but they need that kind of different idea for warm climates.

Beaches. Rain - lots in Florida. AWD for performance purposes. Just skip the snow.

-juice

lark6

Subaru buyers tend to be practical people

Yeah, but there are none of those people in the south.
I think Subarus would make ideal cars for people living in rural areas who need the ground clearance but don't need the size or fuel consumption of a pickup truck. If SoA can get around the "we only buy 'Merkun" mindset - maybe by playing up the "Made in Indiana" angle of some models - they may be able to increase market share.

I can only speak for myself when I say that I have flung Foresters and Outbacks down many a rutted dirt road in South Carolina...and that's all I have to say about that.

Ed

ateixeira

Good point. I switch from a Forester to Miata on a daily basis, and the Miata seems to bottom out all the time. The Forester must have twice the ground clearance. Few cars are as low as a Miata, though.

-juice

rsholland

Good point Ed. Subies (especially Foresters) could do very well in rural areas of this country, the South included.

Bob

anythngbutgm

http://www.leftlanenews.com/subaru-tribeca.html

Not breakthru by any means, but a welcome revision. I like it.

anythngbutgm

http://www.leftlanenews.com/subaru-impreza-wrx.html

Kinda generic but handsome. For some odd reason, I like the nose on my 07' Impreza better as it stands out more but this I can handle... Did Subie and Mitsu collaborate on the wheel design?

rsholland

http://blogs.edmunds.com/Straightline/2566

http://blogs.edmunds.com/Straightline/2559

I expect both these cars to be successes, as they've addressed many long time complaints. The Impreza, now in both 5-door and 4-door models, have a 103.1" wheelbase with much improved rear seat room. Expect to see this same change on the all-new '09 Forester.

Bob

anythngbutgm

Those Tirbeca pics are much nicer. I am so glad they dropped the silly "B9" prefix...

anythngbutgm

that hatch is seriously fugly now the more I look at it. Especially in base form. The sedan pulls off the styling SOOO much better.

varmint

Very nice! Not a striking design, but handsome. I know everyone will see different vehicles in the details, but I think the total package looks unique enough.

I am a little saddened that Subaru revised the rear bumper, though. That was a unique styling detail, which I didn't think hurt the overall look. The new rear-end is very generic.

On the subject of the Impreza, I am less enthused. The mustache grill has been done to death. Saturn had body-colored straight mustaches. Mazda used a thin one for a while (not anymore). Honda put a chrome, wedge-shaped 'stache on the Civic. Right after Honda, Saturn started using something very similar.

nippononly

Soon, all cars of each size will just look the same. I am convinced of it. :-(

I still want to know if there will continue to be an Impreza Outback, as well as a base model. I assume there will, even though the big news is of the WRX.

au1994

I live in the Atlanta area and have wanted a Forester for a while now. I like the practicality of the vehicle and I think it looks good to boot. The AWD is a bonus to me. The Forester is a much better alternative to the other cute utes out there IMO. I think they could sell very well anywhere with the right marketing plan.

I did not get one last year, we decided a truck was much better for our needs and it has been. Often enough I use the truck as a truck was made to be used and it would have been impractical or impossible to do it in a Forester.

Now, I have my wife interested in the Forester! We've been semi-serious shopping as the lease on her car is up soon. If the incentives go up later this summer we may pull the trigger. I would imagine the Outback incentives to get pretty strong as it is being refreshed for next year.

rsholland

As far as I know it's just the 2.5i, WRX and STI to come later.

Those who are complaining that the Impreza has gone soft (not me) will probably be happy with the STI when it arrives. I expect it still to be the street brawler that it is known for.

I expect the new Impreza to appeal to a much larger audience, especially now that the rear seat room has been dramatically improved, and that the styling is no longer frumpy.

Bob

jeffmc

Pics and discussion for the '08s are over at the "Subaru Crew - Future Models II" thread: jeffmc, "Subaru Crew - Future Models II" #19208, 3 Apr 2007 12:58 am
More photos, stats, etc. can be had there.

cuty718

nippononly

Oh MAN! The Impreza was the first Outback there was, wasn't it? I have to think back here, and my memory aint so good....

Do I have to rush out and buy an '07 OBS before the new model arrives????

ateixeira

There is only so much you can do with the shape of a 5 door box.

I think it looks OK, half way between a Mazda3 (D-pillar) and a BMW 1 series (concave door panels).

Hopefully the STI will get fender flares. The base sedan lost those. 4 pot brake calipers are also dropped.

On the other hand, it makes more torque sooner, and it supposed to get 10% better gas mileage.

Going with a 4EAT is a big mistake, but at least most WRX are sold with manuals. I bet Subaru makes a running change for MY2009, as 4 ratios have no place this price class.

Rear seat space is better, and cargo space is much wider, that rear suspsension is so much more compact. The spring towers are all but gone.

The interior looks so much nicer. They took that cue from the Tribeca. It also got the shoulder lines from the 'beca.

Overall, I think the Tribeca update was far more successful, though. Double AVCS, more torque, better efficiency using cheaper fuel, better visibility, and easier ingress/egress. They address a lot of the functional complaints.

The old styling was more distinctive (I'm among the minority that liked it), but the new look is more butch, like the old one spent some time in the gym and beefed up.

I'm impressed that they didn't overcompensate here, as the shoulder lines are still present, as are the handsome fender flares. The roof rack makes it look taller, and that plus the taller hood help to give it a more masculine look.

I'm impressed, in fact if it drives well and the fuel economy gains pan out, this will likely be my next vehicle. :shades:

nippononly

The Subaru Crew has posted, to my relief, that there WILL be a new OBS in about a year. I think my next Sube is about 4 years off, to be one of the next-gen OBS with the longer wheelbase. I still miss my '97, NEVER should have sold that car. I hope they get the fuel economy up or offer a hybrid in the OBS by 2010 or so....

juice: so the '08 Highlander isn't even up for consideration? Sounds like it will come in a couple grand below the price of your prospective 'Beca, with the same FE and better power (and maybe a more useable third row). Or is it just that you can't wait until late summer?

varmint

I think Toyota's strategy for the new Highlander was to buy up all the bland-looking sheet metal in North America, leaving none for Honda to apply to the Pilot.

As much as I disliked the original Tribeca, the new sheet metal is far better looking than the new 'Yota. Wouldn't blame Juice if that alone turned him away. Personally, I'd be looking very closely at the CX-9 if I didn't already have an MDX.

rsholland

The new Tribeca is essentially the stillborn Saab 9-6x. When Subaru split from GM, they took the Saab design and applied to the Tribeca. I suspected that when I posted this Straightline blog, and later had it confirmed by someone in the know.

http://blogs.edmunds.com/Straightline/2590

I bet the only thing they had to change was the grille, hood and front facia. The rest was just lifted from the Saab version.

Bob