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

ateixeira

The new WRX will appeal to non-boy racers, so that should broaden the net they use to capture buyers.

The new Forester will finally get a longer wheelbase and a size more in line with the rest of that class nowadays.

I think the numbers are only a tiny bit optimistic. By the time they get both of them in production we'll see 230k sales.

Diesels are coming but that won't put too much of a dent on sales.

nippononly

to sell a new Daihatsu-based Justy in Europe next year:

http://www.autoweek.com/apps/pbcs.dll/article?AID=/20070627/FREE/70626013/1528/newsletter01

And from there to U.S. sales, eh? ;-)

Suuuure would be nice to see Subaru with an entry-level model in the States again...

ateixeira

Not likely, so don't hold your breath.

I'd rather see them bring the R1e over here, especially if the Smart ForTwo turns out to be a success.

nippononly

it would be really cool if they would sell the S/C version of the R2 here. Sure it's small. But a lot of the smallest cars like the Yaris 3-door are being bought as city runabouts and college cars for kids, which the R2 would be perfectly adequate for.

ateixeira

I tried to squeeze in to a Smart Roadster, the one tuned by Brabus.

I'd share a photo but trust me, it was NOT pretty!

I would love a sporty and economical 2 seater like that to replace the Miata. The new Miata has gone upscale in price and now requires premium fuel. No longer the ideal budget fun commuter.

nippononly

Subaru is down almost 7% for the year in the U.S. and will just barely make 185,000 sales by year's end? Wasn't there talk of 200K this year, or more , or...?! :-P

http://www.freep.com/apps/pbcs.dll/article?AID=/20071003/BUSINESS01/710030398/10- 14

I wonder if the homogenized Tribeca or the new Impreza will take off with a notable increase in sales from the previous model. They do have lots of good leases now - I was surprised to see full-page ads in the auto section of the paper last weekend and the one before. That is a first in my experience, usually Subaru advertising in the weekend auto section is a footnote at best.

And it seems like you can get almost every model for $199/month too. An attractive number indeed...

rsholland

September sales are in and the new Impreza set sales records for that month both here and in Canada. The new Tribeca is also selling better than the outgoing model.

Unlike many automakers, Subaru sales were up for September.

http://blogs.edmunds.com/Straightline/3517

So regardless of what kind of spin you put on that, it's still good news for Subaru.

Bob

robr2

But they don't distinguish between 07 and 08 models - both were available during the month. Is the uptick in numbers a result of great incentives on 07's or the new 08 product changes?

If the former - then sales without little/no profit isn't good news. If the latter, then good for them.

I'm just pragmatic and don't use the rose colored glasses.

rsholland

I'm sure the Impreza sales included both '07 and '08 models. October and beyond will be a better indicator, as there will be fewer '07 models on the lots as time goes on.

Still I'd rather have them setting sales records, regardless of the makeup, than losing sales.

Bob

robr2

Still I'd rather have them setting sales records, regardless of the makeup, than losing sales.

True but unless those sales are profitable, they are meaningless. But we'll never know if they are or aren't.

Didn't you earn anything from the dot com era??? "But we're losing money!! That's OK - we'll make it up in volume."

ateixeira

The market as a whole absolutely tanked for the month, but like Bob said Subaru had their best September ever.

It's the 2008s, too. The Tribeca really picked up after the face-lift. My local dealer sold out of the 07s a while ago.

Having said that, they may not hit 200k only because it look like it will be a dismal year for auto sales overall. I doubt most automakers will meet their goals.

varmint

According to Nippon's link, the total market is down 2.8% for the year. IMO, that would be a logical baseline. Better than that is good. Lower is not good. Subaru is down 6.9%.

A good September is a good month (kudos Subaru), but Nippon was posting about the bigger picture.

nippononly

Subaru is always "having their best (fill in the blank) ever". But Honda and Nissan were both up in sales way more than Subaru. And Subaru is still down for the year significantly more than the overall market is. If September '07 was a Subaru record for the month of September, well OK, whatever. It doesn't really change the bigger picture much. So we will see. Local dealers in the Bay Area are STILL struggling to get rid of all their '07 Imprezas even more than a month after the '08s arrived, and likely well after they last ordered any '07s.

I do think the promo leases are so prolific now that they will boost sales somewhat. That's a smart move - could it be that Subaru has boosted its ad budget?

stever

"But we're losing money!! That's OK - we'll make it up in volume."

I always liked "We cheat the other guy and pass the savings on to you."

nippononly

I took a quick look back in this thread, and it was only June this year they were saying 200K sales this year, and 230K annual sales by 2010???

Maybe they can start that next year.

ateixeira

The outlook is dismal, I'm looking at forecasts. The sub-prime lending crisis is a very recent phenomenon, and I think it only began its effect on the auto market in September (maybe a tiny bit in August).

Why is Subaru down 6.9% this year?

The Forester is in its last year, and that's #2 in volume.

Impreza was in its last year, though it actually did well. The new Impreza is doing better, but it might not be enough to offset a lousy market.

The Tribeca just picked up recently, and probably doesn't do enough volume to pick Subaru up regardless.

They need to hurry that Forester up. It won't arrive until Q1 or Q2 next year so 200k sales are pretty hopeless.

I have high hopes for the 2009 Forester because it'll get the wheelbase of the Impreza (or bigger) plus a more compact rear suspension, which also happens to handle better. Toss in more refinement, greater VDC availability, and don't be surprised if it outsells the aging Outback.

varmint

Okay, that's fair. But I think the dismal reports in the press are too focused on the domestics (the traditional leaders) and aren't paying attention the market as a whole. Toyota, Honda, Nissan, BMW, Mazda, and other are all up for the year. Heck, Mitsu is up 17%. Obviously, there are buyers out there. The companies simply need to find them.

The Forester is in its last year, and that's #2 in volume.

Point taken, but c'mon. Honda is up on the year despite having it's #1 seller at the end of its cycle. It's not like Subaru didn't know the Forester was going to be long in the tooth when they made that prediction.

ateixeira

I think we're both right, we're just making different points.

You're talking about a slow Jan-Sept, and I'm talking about Sept-Dec.

So basically they're down slightly for Q1-Q3 but they've recently launched one significant update (Tribeca), one new model (Impreza), and have one coming soon in the pipeline (Forester). 2/3 are doing well so far, and the 3rd looks promising.

So the product is improving, but I still don't think it's enough to offset the downturn I predict for the entire auto market.

Honda had a good month, but Toyota was down, FWIW. In the minivan threads they're saying the Ody has a $2000 incentive right now on 07s, while the new 08 Sienna has none, and dealers ran out of 07s. So the Ody minivan is *killing* with that $2k.

As a matter of fact, I believe it was first overall in minivan sales last month, beating even Dodge.

So the Honda thing may just be a matter of timing and incentives, I'm really not sure.

I'm a bit peeved because I shopped Ody vs. Sienna back in May and an Ody EX was $26.6k, now they say you can get an EX-L for less than that! :mad:

I'm happy with the Sienna but it would have been nice to have the choice.

dtownfb

While it is good news overall for Subaru. I don't see them selling 200k units. When they made the decision to make all their vehicles AWD, they put themselves into a niche market. Not everyone needs or wants AWD. Too much of a gas mileage penalty for marginal (if any) performance gain. None of their vehicles except the Tribeca gets comparable gas mileage to the competition. Also how many people really need to drive around in 4 inches of snow. I don't know about all of you but here in southcentral PA, any threat of snow results in cancellation of schools, meetings, events, etc. Since we all have access to radios and/or the Weather Channel, snow storms rarely sneak up on you. Let's not discuss the limited dealer network and sticker shock.

Personally, I was turned off to Subaru when I couldn't fit into a Legacy sedan. At 6'4' tall, I would have to drive with my knees. Still a nice vehicle.

nippononly

they are plastering the TV airwaves with those ads for the new Impreza. It's nice to see Impreza, traditionally the mostly-ignored "ugly duckling" of the line get some attention for once. Who knows, between the ads and the promo lease, we might see non-WRX Impreza sales rise for once.

jeffmc

"When they made the decision to make all their vehicles AWD, they put themselves into a niche market. Not everyone needs or wants AWD. Too much of a gas mileage penalty for marginal (if any) performance gain."

Forester, for example, is already more fuel-efficient than nearly all similar AWD vehicles (the new RAV is the exception I can think of), and it's the oldest Subie in the stable. However, it has very minimal MPG loss (if any!) compared to similar 2WD vehicles as well: PT Cruiser 19/26; HHR 23/30; 2WD CRV 23/30; new Scion Xb 22/28; Rondo 21/29; Forester 23/28. Forester's city MPG is tied for the best, and hwy MPG is only 2 MPG lower than the leaders. Among those competitors, Forester offers the most horsepower, the most torque, and AWD and the tradeoff vs. competition is only 2 MPG highway. I can't see much to complain about there. Again, RAV4 is one of the few competitors I can think of off the top of my head that does beat Forester MPG-wise, and it deserves kudos.

Granted, there's always room for increased fuel economy, and I'm glad to Subaru is working to make some dramatic improvements (direction injection, diesel, CVT, etc.) in an area I think they're already pretty good in. It's their image that needs the improvement - a couple of high-MPG options would be helpful - but they're getting there.

Personally, I (at 5'7") like the size of the Legacy sedan, but yeah, they need to grow a little. They're generally some of the smallest cars in the classes they compete in.

ateixeira

Legacy/Outback will grow. Test mules are already out there and it looks like they will have a longer wheelbase, but not necessarily any more length.

Question is the Forester. Will it stay Impreza-based, or will rumors of a baby Tribeca prove true? Some are saying it will be a downsized Tribeca rather than a tall Impreza.

I sort of doubt that because the Forester is made in Japan alongside the Impreza, so from a production stand point it makes more sense to let those share parts.

nippononly

If they base the new Forester on a shrunken Tribeca platform, I fear it will become suuuper porky....

ateixeira

I have cost concerns.

The Rogue came in at $21k for starters. Even the bigger entries are holding their starting prices fairly low.

They can't show up with a mini-me Tribeca for, say, $2000 less and find many buyers.

nippononly

All of the Big 3 Japanese (CRV, RAV, Rogue) start around $22K sticker for their low-end AWD models, right? I agree with you, Subaru needs to be close to that point. Right now Forester is the bargain of the bunch of course, with the 'X' trim.

A Forester with a $27K starting price will kill the Forester line so quickly heads will spin.

The current Forester is just the right size for a cute ute, that is why it has sold so well I think. The new Impreza platform will be the perfect choice on which to base the new Forester.

dino001

All of the Big 3 Japanese (CRV, RAV, Rogue) start around $22K sticker for their low-end AWD models, right?

Do they - or is it FWD for that price? I don't know, tell me.

kyfdx

But, it looks a lot smaller than the CR-V or RAV4...

Rear seat access looks iffy, and cargo capacity seems substantially less... More of a hatchback, than a wagon.

ateixeira

The reason I brought it up was becuase the price came in lower than expected.

Subaru cannot come in with a higher than expected price. That would kill volume.

AWD can be seen as a price handicap. To burden it with a Tribeca-like price would seal its fate.

The Impreza's improvements would be plenty, IMO. Give it VDC, SAC, NAV, and especially that compact rear suspension, and keep prices within a grand of where they are now. I have my deposit waiting.

tifighter

I hope the new Forester has fore and aft adjustment for the rear seats like the RAV4 and CRV. Slide the seats back for more legroom, or forward for more cargo space. So easy, a caveman could do it...

daysailer

A logical & useful feature, if not new. My '84 civic had a rear seat with fore & aft adjustment AND reclining seat backs. Too bad good ideas are often abandoned.

dino001

I really think their marketing is in the crapper. They bounce around with ideas that each has its merits ("lets go upscale", "lets go back to the roots", "lets go mainstream"), but they never fully delivered on any than they scrap it and go another way.

At the end they manage to alienate more and more of their current following but (lets scrap Legacy wagon, lets make WRX soft and fuzzy, but hold back the lux stuff) but not gain much ground in their new target audience.

The only bright point I see now is the new Tribeca. Hopefully it wasn't too little too late, as the initial effort fell so flat that it's hard to recover from such blunder.

ateixeira

They have a new CEO so expect even more changes.

Right now they are experimenting with new looks and I agree, they haven't been consistent, and that needs to change.

Though one peek at the Tokyo concepts tells me it's same-old, same-old. You can't even tell either concept is a Subaru. The Exiga looks like a future Acura TSX wagon concept:

http://blogs.edmunds.com/Straightline/3543

The boxy profile, the chrome-tastic grille, and the cameras in place of side mirrors all copy Acura ideas.

The G4e looks Asian, but it could be any Asian make, nothing about it says Subaru:

http://blogs.edmunds.com/Straightline/3542

The lights hint at Acura, but it could just as easily have been a Mazda or Suzuki.

At least they're just gauging response to the concepts, I hope they don't actually adopt these designs. :sick:

jeffmc

It's deja vu from the 2001 Tokyo show. Exiga was WX-01 then, and G4e was the smaller HM-01 (even with the cameras on the A-pillar).
http://www.sae.org/automag/globalvehicles/12-2001/subaru.htm

Subaru's people-mover for JDM is supposed to launch in about a year, and I'd imagine the Exiga fits that bill... hopefully this exterior's not too close to the real thing. Grill is terrible. I do like that silver rear 3/4 image of the Exiga, though. Love the glass roof, too. If they could get a larger 3rd row than Tribeca, that would work for me. Otherwise, I'd rather go w/Tribeca.

The G4e, on the other hand, I'm actually excited about. Their new global subcompact is supposed to come out around end of '09/early '10, which is also the time Subaru said they plan to commercialize an electric vehicle. And guess what... this concept is subcompact and is an evolution of R1e's technology. The size of the G4e is perfect for globalizing... wider, taller, and much longer wheelbase than Honda Fit, but about 1/2" shorter overall length than Fit. Keep those dimensions w/good passenger room, add the advertised electric tech, and I think it's an absolute grand slam. (I think they can get the good passenger room too, 'cause the batteries are under the floor, which also keeps center of gravity low.) I would own a vehicle like that in a heartbeat, and would be willing to pay a premium to do so... preferrably AWD. This concept is finally a Subaru electric that is large enough to have a more realistic chance of making it to the States than the R1e (though I'd buy an R1e if they offered it here, even though it's not as versatile as the G4e would be).

Subaru of America: meet me on the dealer's lot in April, 2010. You bring your G4e and I'll bring my wallet.

jeffmc

Change the color from earthy-fun-but-garish green on the G4e, and I bet you guys would warm up to it real quick-like.

rsholland

I like the G4. I think, with the 1.5 boxer and AWD, it would make a great replacement for the just-indroduced Justy.

Bob

andrelaplume

I looked at a legacy 5 years ago and ended up with a Camry that is fine but stinks in the snow and rain. I am looking again and I see the Legacy is essentially the same. Subaru should win an award for how many ways you can change the front and rear of a car.

Maybe I'll hold out a while since it sounds like they are finally going to produce something 4 average size adults can fit in!

Ditto on the Forester, my wife ended up in an 07 RAV.

nippononly

with Ikuo Mori, the head of FHI back in Japan:

http://www.autonews.com/apps/pbcs.dll/article?AID=/20071022/ANA03/710220302/1136- -

Sounds now like diesels in North American are still at least 5 years away. :-(

And hybrids are even further. And they are STILL aiming for 230K to 240K sales per year by 2010, three very short years away given that this year will probably fall around the 185K mark, almost 10% lower than last year.

And they are still nurturing their plan to "go premium", but they just think the timeline for that will be more like a decade now...

This guy has been in his job about a year and a half, by the sound of it. It will be interesting to see if he stays in it through 2010.

ateixeira

I got the e-mail notice and the headline, but you have to be a premium subscriber to see that article. I'm registered and it doesn't work.

Here's the headline, though:

Subaru chief puts brakes on shift upmarket
Ikuo Mori emerged from an unorthodox career path to take the helm of Fuji Heavy Industries Ltd. in June 2006. In a company long dominated by engineers and technophiles, Mori's last stop before the president's office was as head of overseas marketing

I guess this is what he meant when he wanted a more customer/marketing focused Subaru, vs. engineering focused.

So far we've seen the WRX grow a little more refined and gain things like VSC and window frames, but drop things like the rear LSD. Some old school Subaru fans are up in arms, but so far sales are up.

dino001

Some old school Subaru fans are up in arms, but so far sales are up.

Lets leave this judgment until meaningful comparison periods form - such as early '02 intro months percentage increase vs old '01 model would be one. I don't have that data - do you? Or lets wait at least sx months of sales so a backlog has a chance to form - if it doesn't then we could say it's a success.

Novality will always find some new fans. How much did Impreza sales rise one month after new model in '02 show up? A lot perhaps. I remember many dealers wanting ADMs for new WRX in first few months. However, In January '03 I bought mine practically at invoice (plus some accessories at retail, but w/free installation of short-throw shifter and Rear diff protector), got 3.9% APR 60-month financing and got fair value for the trade. So it didn't take very long to go down - and WRX was totally new then. To be fair it was time of rampant 0% from GM and Ford. Lets see how quickly this will come down.

2.5i should be selling well - it's a great bargain. WRX is not. It is better than previous, and relatively similarly priced as early '02. It also suffers from similar value drawbacks as that one vs competition, just on a different level - not because it is worse, but because competition leapfrogged over it keeping the price in check.

You keep talking about this magic refinement. I simply don't see it in a car that cost nearly 30 grand. Dashboard design and surfaces are not much better than '07 iteration - control dials are recycled from previous models, color scheme is uninspiring at best, radio looks like like from '95 Audi. OK - doors shut nicely and fit and finish is better. But it's just simply not enough for nearly 30 grand! Things like that were forgivable in 2002, they are not in 2008. When they add 2 grand cashback, change interior color scheme, add sunroof and keep the sticker at same level, I will have a second look.

ateixeira

Valid points about sales.

The 02 was the first WRX in the US, so we really cannot compare to 2001, when the RS was the top model.

Also, sales are up globally, in the US the first month was strong but it was a mix of 07 and 08 models, so we have to wait and see how the 08 sells by itself.

Still, so far so good. Usually in the early months sales are down to ramp up production. Such a dip did not occur.

Let's debate the merits of the 08 WRX in another thread. This topic is broader, and I only brought up the WRX to try to understand what the new CEO means when he says consumer focused vs. engineering focused.

dino001

Allright. We shall see what they mean by customer focus. It may mean a lot of things - for example getting into cloning Camry. And you know what I think about that.

ateixeira

I do, but Toyota has to hire more accountants to count all the money while Subaru impresses engineers and enthusiasts that simply don't buy cars in large numbers, and even then may be more likely to buy WRXs used for track purposes.

Besides that, I don't think they cloned the Camry at all, and you need to go out and drive them both back to back if you still think so. :P

dino001

I didn't say they DID clone Camry - I just don't want them to START in alleged pursuit of customer's preferences. And for their own sake. Nissan tried and failed. Mazda tried and failed. Both of them almost got wiped out before went back to what they do best - and their sales volumes went up again. I just don't want Subaru doing the same thing and going to complete oblivion. Nissan and Mazda had some cushion, Subaru doesn't. If they get into Camry cloning, they'll Saabize in a hurry.

ateixeira

OK, gotcha, I'm just tired of hearing the "like a Camry" comments from people who haven't driven both (or either!), as if a nose-heavy FWD would feel anything like the new, lighter-than-the-last-one WRX.

Motorweek is going to drive one for their next episode, which will air here in MD on Saturday.

rsholland

Also up were Tribeca sales.

http://vocuspr.vocus.com/vocuspr30/N...3-077f582d5242:

Bob

nippononly

laugh out loud!

http://www.detnews.com/apps/pbcs.dll/article?AID=/20071103/AUTO03/711030303/1149- /AUTO01

And it's on point about some of the rollicking sea changes Subaru corporate has made so far this decade. I find it hard to believe that Subie made the new WRX as maritime in its handling as many of the reviewers have said...

stever

And by the way, the WRX's hood scoop looks like a bizarre experiment in trepanation.

Trepanation - the experience of a person who had a hole drilled through his skull.

That reviewer has quite the thesaurus!

jeffmc

Finding new & witty ways to put down Subaru products seems to be a worrisome trend, and calling Impreza "the franchise" for Subaru is just ignorant. That said, I did like the line, "Subaru is the Dr. Lao of car companies."

nippononly

THANK YOU SO MUCH for shedding some light on the Dr. Lao remark! I laughed out loud when I read it, and that was without even knowing who Dr. Lao was! :-P

I will agree that the author was wide of the remark to say that the WRX is the franchise for Subaru, but I will add that Subaru is mostly a 2-trick pony this last decade: Outback and then WRX. And I thought the Impreza remark was the widest of the mark that the author ever got. It is certainly right on target to say that the newly redesigned Tribeca looks exactly like the new Chrysler minivan from the front.

I think WRX will continue to sell at about the same levels it has been - rather than widening its audience, the redesign has merely adjusted its aim a little toward the conservative end of the spectrum. I just tonight discovered that they have downgraded the base stereo in the WRX to the crappy 4-speaker affair in the lowest Impreza trim. That seems quite underwhelming in a $25K car. To get sat radio and some extra speakers, you have to go for a $2000 premium package too, apparently. That's $27K, gee-whiz pricing territory crowded with very very competent competitors. If you want leather as well, you will be at $29K in the blink of an eye. Pricey.

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.

jeffmc

"...but I will add that Subaru is mostly a 2-trick pony this last decade: Outback and then WRX."

Forester deserves a good share of the credit. Way more important than WRX, IMHO. Forester always outsold Impreza, and some months it would even outsell Outback. Consistently won awards & even pushed the WRX for performance. Snared many buyers during the small SUV trend, and helped the car-based crossover trend build up steam by pushing the competition.

The good things WRX did: opened up the performance possibilities for the other models (XT & GT Forester, Outback & Legacy) and grabbed the attention of younger consumers.