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

kyfdx

So.. Subaru can never expand their sales? Any sales of a new model would come at the expense of their currrent models?

I guess if the die-hard enthusiasts can be swayed that easily by a cloned Camry, then they must be in bigger trouble than I thought.. :surprise:

paisan

Nope they will increase their sales by offering a new or better niche market vehicle. Something that wouldn't even come onto the radar of a major manufacturer. This is how they will prosper and no I don't see them expanding their sales greatly and definitely not on the H/T home turf.

The 2010 Legacy will be telling. If it's big enough they will start to pull in sales from the H/T camp, but not by beating them in their own game, but by changing the game to suit their strengths (AWD and Handling). I've also said they should look at the light-offroad market as another niche market that they can really capitalize on. Not the hard core Jeep Rubicon off-roaders but the lighter offroad folks who are campers and canoers but want a low range and good clearance. Basically make the Outback more beefy, higher, etc. This would also help to distinguish itself from the more elegent Legacy and legacy Wagon arena.

-mike

kyfdx

Only one problem...

Have you seen the price of gas?

paisan

I guess if the die-hard enthusiasts can be swayed that easily by a cloned Camry, then they must be in bigger trouble than I thought..

Put it this way, if I were in the market for a larger legacy and wanted FWD, I'd shop the Camaccord. Why would I not shop it? H/T have years of experience making FWD sedans, they are reliable like a refrigerator, and there are more dealers than you can shake a stick at, if it does break. I am also one of the most die-hard Subaru fans out there. Heck I road race a 94 Legacy Turbo, and people look at me at the track like I'm nutz!

Right now for my next car, I'm starting to look around at what other AWD Large Sedans there are out there in my price range. (25-45K) and I may give up the Manual to get an AWD larger car cause there just isn't one. Cars in the running?

Caddy STS
Audi A6
Charger/300C
Tarus/Sable

That's a pretty small market (Volvo is also in there but I don't like the looks).

-mike

varmint

"As I said, what reason would a buyer have to buy the FWD Family Sedan from Subaru?"

Hop in your time machine and go back to 2000. Why would anyone buy an Altima over an Accord, Camry, or Maxima? Why would anyone buy a Malibu?

Build a good product. Buyers will buy it. I think Soob could build a better FWD sedan than GM.

And, by the way, you don't create economies of scale by offering nothing but cars in budget-price niches. You can survive selling low profit vehicles in high volumes. You can survive selling low volume at high prices. You cannot get anywhere selling low profit in low volume.

paisan

Only one problem...

Have you seen the price of gas?

Yup, but if you can't fit, you can't fit.

The Accord and Camary have both grown in this iteration and I'm sure it's in response to the fact that folks want a roomier car, even at the price of gas.

Also I may be a bad example, I own an Armada, Cigarette Boat, Race Car. My 1990 Nissan 240sx commuter car and 05 Legacy GT Wagon commuter both sip gas compared to any of my other vehicles

-mike

varmint

"Basically make the Outback more beefy, higher, etc."

How is that going to stack up against a Pilot, Highlander, Acadia, Edge, or even the Tribeca?

paisan

Hop in your time machine and go back to 2000. Why would anyone buy an Altima over an Accord, Camry, or Maxima? Why would anyone buy a Malibu?

Price.

Altima and Malibu are significantly cheaper than the Accord/Camry/Maxima.

-mike

paisan

"Basically make the Outback more beefy, higher, etc."

How is that going to stack up against a Pilot, Highlander, Acadia, Edge, or even the Tribeca?

It's not supposed to. The point would be to have a low-range gear box, significantly better off road abilities (which the Pilot, highlander, acadia, edge and tribecca have zero) and cater to the canoe toting professors and mountain bikers who NEED to get to places that the other cute-utes can't take them. Not as beefy as the Rubicon, but a vehicle that can hold it's own in the outdoorsy set. A niche that can yield profits and that's why car companies are in business, to make money. As you said, a lower volume, higher profit vehicle.

-mike

stever

Hey, I've been promoted to professor. Sweet. :shades:

My Outback is nice for hauling canoes, since it's not so tall. It's a stretch getting my boats up on the minivan. The ground clearance now is about right; can't see that I need any more on it.

A FWD Legacy wagon would work fine for me too, especially if I could eke 30 mpg out of it around town. Since the minivan gets as good, or better, mpg than my Outback, it's usually the canoe hauling rig of choice around here. The ground clearance is lousy though.

mrsixpack

I seen my first Armada a few days ago....my jaw hit the floorboard of my 21 year old Escort !
All I could think of was that was the biggest Datsun and likely the most expensive Datsun I have ever seen !

My only question was "WHY".............................

paisan

Well so you can carry 7 people comfortably. Also so you can tow toys around

kyfdx

Altima and Malibu are significantly cheaper than the Accord/Camry/Maxima.


You have to get out more...

Seriously... varmint made some good points.. The way things are is not how they will always be.. Nissan took the Altima, which was a cheaper, smaller car non-competitor to the Camry/Accord, and turned it into a mainstream family sedan that competes directly with them (and, NOT cheaper).

My point about gas? Subaru is way behind in passenger car fuel efficiency.. They can fix part of that by offering a FWD family sedan, and a FWD Impreza... It would be worth it, just for marketing purposes.. Or.. if Toyota wants to give them a Corolla/Camry clone, that would work, as well.. They could even restrict it to the stripper CE models.. and, keep their AWD Legacys as the upmarket model..

The problem with small car companies depending on niches? If you misjudge the market, you can take a big financial hit.. Or, even if the market changes in a way you didn't foresee ($4/gal. gas?).

Subaru was way ahead on the AWD craze.. That is a good thing... but, it is also an easy thing for other companies to add. That differentiation won't last forever... They'll do better going where the market leads them, than depending on their heritage.

--------------------------------

Another example of a small car company that changed with the market?

BMW... known for sport sedans. In the mid-'90s, they sold three models.. 3-series, 5-series and 7-series.. They added a roadster (the purists howled).. They added an SUV (more howling).. They started making FWD econoboxes (not a real BMW!!). They brought out another SUV (what happened to their soul!)...

There are still old guys sitting around at the CCA meetings lamenting how the last good car they made was a '91 325is.. but, I'd take those results, any time... Now.. no one thinks of them as a niche player or a small car company..

Wow... this is my longest post ever... :surprise:

ateixeira

Busy thread.

If you speed-read and skipped post 2911 by paisan, I'll ask you politey to read that post again. It's very insightful and summarizes the situation pretty nicely.

varmint countered with two examples: Altima and Malibu. Let's look a bit more at those.

Nissan took the sporty fringe with the Altima and it nearly killed them. Renault took over. Not exactly what Subaru wants. They are doing better now, thanks to Carlos "le cost cutter" Ghosn from Renault basically doing a hostile takeover of Nissan.

Malibu is built on the Epsilon platform. Talk about economies of scale. They build the Saab 9-3 sedan and wagon, Saturn Aura and Aura hybrid, and Pontiac G6 coupe, convertible, and sedan all on that same platform. The engines are all off-the-shelf corporate powertrains. The 4 banger is off the shelf, the hybrid is straight from the Aura Greenline, one V6 is the corporate pushrod engine and the other is a de-tuned Cadillac/Lambda mill.

Both are very different situations. Successful products, sure, no debate there, but Subaru isn't really in the same position, unless they want to fold completely and just let Toyota take over like Renault did for Nissan.

OK, since I've only mentioned what *not* to do, and that is my pet peeve, see my next post for my ideas on the things they could do...

ateixeira

And how timely...

Debate at Scion: How to grow
Some fear more products would hurt hip image

Toyota has this problem. Scion was supposed to stand out as edgy and unique, and their updated products moved them too far towards the mainstream.

What to do?

Camry sedan clone? No way. That would kill Scion's image immediately. Corolla? That didn't help, they put the Corolla engine in the xD and sales tanked. SUVs? Bad timing, oil is $111/barrel. Hybrid? That's the Prius' job, in fact Prius may become a brand.

What can Scion do differently?

How can they get more volume from existing platforms and engines and still not cannibalize Toyota? Something unique, on the fringe?

Answer: Subaru.

Clear as day.

Even better, use Subaru's 2.5l PZEV engines only. Remember, Toyota has marketed their green image better than anyone.

In no time at all, Scion could have a mid-size crossover based on the Outback, a small crossover based on the Impreza. FWD and AWD. Mostly off the shelf.

Caveat - the body styles would have to be radically different - very boxy perhaps. You wouldn't even recognize the underpinnings if they were.

In the long term, I think the xD and xB would have to shrink back down to where sales were better anyway.

Another thought - diesels. Not exactly a Toyota strength, since they bet the farm on hybrids. Subaru's new diesel is getting rave reviews in Europe. Once again Toyota can hedge their bets.

If a Toyota diesel fails, that's a PR nightmare.

If a Scion diesel fails, they can just say it was intended for a short production run anyway. Mitigates risks to their image nicely.

It's much easier for Scion to sell unique products than it would be for Subaru to sell generic ones.

scwmcan

Actually I don't see the problem with offering a FWD version of the legacy and the imprezza, Subaru used to do it and could easily do so again. It wouldn't add to the costs to develop the cars (they just need to remove the rear drvie compantent basically) so what is the harm in it? It would probably improve the economy of scale on the cars (if they wound up selling even 10,000 cars that they wouldn't have sold otherwise it would be a big boost for them). It would also improve the economy issue, I am sure that a FWD version of the car would get better milage than the AWD version, so they would be able to advertise this fact. And the cost of the FWD version would be able to be at the same level as the camcords most likely. I can speak from experience, because I owned a FWD Subaru, which was great fun to drive, and gave me great fuel economy (a "loyale" 3 door coupe from the 80's). I see no reason, besides the fact they have marketed the AWD advantage so much, that they could not return to offering both with a little creative marketing. I like the AWD Subarus too, but the fuel milage hit made it so I couldn't buy one last year, it didn't even get on the radar because of it, if they had a FWD imprezza with better fuel economy I might be driving one of them today.
Scott

ateixeira

I'll summarize a few basic points I've made here before...

* when Subaru droppped FWD for 1995, their sales went up, not down
* fuel economy still would not match Camry or Accord, so they would not capture those looking for peak MPG anyway
* the Legacy is still smaller than its competition, and would no longer stand out in any significant way
* they have poked fun at others in marketing that didn't make AWD standard => hypocracy
* it would abandon the whole strategy that doubled sales in the last decade = suicide?

They can gain economies of scale if they build more vehicles overall, but what guarantee is there given it failed last time they tried it?

Plus they risk their AWD reputation, their identity, even, for that who-knows-if-it-will-work-because-it-failed-last-time strategy.

I'll say it again - why not use Scion to market FWD vehicles based on Subaru platforms? You would have nothing to lose.

Why label them Subarus? Risk more, gain less. Scion has more dealers. Scion needs cars with character.

Subaru struggled to sell vanilla cars, and still would today.

So, how can you reverse the "fortunes sinking"? My ideas:

* build Subaru-based cars for Scion, both AWD and FWD
* hire Subaru's Lithium Ion engineers to work with Toyota's HSD
* fill out excess capacity at the SIA plant in Indiana (done)
* address primary complaint of the current lineup (rear legroom) with each new redesign

The did that last one one for the Forester. 2010 for the Legacy and Outback.

Subaru's R1e pure electric is out there using Lithium Ion batteries that charge to 80% capacity in 15 minutes. Way, way ahead of Toyota.

Lots of automakers make money by consulting with or licensing technology out to other manufacturers. Toyota hiring Subaru for Li-ion battery technology is just common sense. It's probably already happening.

We own a Toyota and a Subaru. Trust me, their DNA is *not* interchangeable. The feel of the steering is night and day, numb lightness vs. linear heft. The sound of the engine, too, sewing machine vs. boxer growl. The torque steer (or lack thereof).

Scion is different, they are supposed to be different, that's why they exist in the first place. They could get away with marketing a Subaru-based vehicle, at least it if had that box-on-wheels style.

varmint

Mike, I don't see how that niche is going to yield profits. You make the Outback more trail-worthy by adding hardware. All this extra hardware is probably going to add weight (reducing performance and efficiency). Then you bump up the price to the point where they gain a significant advantage in profit margins (taking them away from core buyers). The result is a car that doesn't function off-road quite as well as an SUV, doesn't quite have the image of an SUV, costs as much (if not more), AND it pisses off loyal Outback buyers who appreciated its former car-like qualities and lower-than-an-SUV price.

Instead of bumping up against the Murano, Edge, and Tribeca, you've got it going head to head with the Grand Cherokee, Xterra, 4Runner, and others. What am I missing here?

I'm behind you all the way when it comes to making a slightly larger, more spacious Outback, but that's where we part ways.

ateixeira

Let's look at this from another angle.

What is a Subaru's competitive advantage? Why would you buy one?

For me, at least, it would be:

* good 55/45 front to rear weight balance
* lack of torque steer
* ability to get power down effectively
* all season capability
* good steering feel
* extra ground clearance (some models)
* wagon bodystyle availability
* better than average towing for its class
* good safety record in crash tests

Take away the AWD, and the list is reduced to very little:

* extra ground clearance (some models)
* wagon bodystyle availability
* good safety record in crash tests

Prices would drop, but they can't beat the Koreans on a small scale nor could they compete with the economies of scale of the big guys, so this would still not be a competitive advantage.

Gas mileage would improve slightly but again, they would not match the most efficient mills from Honda and Toyota, and the turbos would still need premium so that's a tough sell. No competitive advantage.

You'd lose a lot of the reasons to pick one in the first place.

* nose-heavy 60/40 weight split
* torque steer
* wheelspin on turbos
* fair weather friend
* steering feel not as good as before with front wheels putting all the power down
* reduced towing capacity likely given the rear axle does not of the work

So, then, why buy a FWD Subaru? :confuse:

varmint

Actually, Juice, post 2911 suggests there is no good reason to buy a Legacy (other than AWD). Subaru is apparently out-done in every other important measure.

If you accept Paisan's analysis about the importance of AWD, then you've got to accept mine about the threat posed by the Fusion and other AWD vehicles soon to join the market. If someone decides to invade Subaru's niche, then there's no reason to buy a Soob. If that isn't incentive to do something differently, I dunno what is!

I figure if GM can build a competitive FWD car to go head to head with Toyota and Honda, then so can Subaru. You can say that GM has huge economies of scale, but Subaru had access to the GM parts bin for years. They elected not to use them. Now they have some access to Toyota's! Furthermore, while GM has huge economies of scale, they also have huge debts. They had to sell off Subaru in order to keep afloat.

scwmcan

I certainly don't see the problem with Toyota using subaru as a knowledge base for the lithium =-ion batteries etc.
Please note at no point did I say that I thought (as some other poster basically said) that subaru should sell a version of the camary (big trouble for subaru if they did that) I agree that the only problem for subaru selling a FWD version of their cars is that they have marketed themselves into the AWD only segment and that they would look foolish to back down on that. I think you may have missed the point that Subarus increased sales came with the outback models, it was a marketing triumph and the basically doubled their models just by raising the height of the wagons and adding some cladding, and they also introduced the forester shotly after, it was this addition of models as well as successful marketing that lead to this success not just dropping the FWD models (and basically that was so they could sell the higher profit AWD models) . I think it would be a mistake for both subaru and scion to sell a warmed (or even completely rebodied) over FWD subaru as a scion (and no scion should not have the AWD models, why introduce more competition to subarus own models??). And why would the scion versions be successful if as subarus they canb't be successful.
I do think that the diesel engines will help out Subaru since the milage will be much more acceptable, but that advantage can disappear quite easily if Honda etc see that subaru is selling more cars because of the milage of the diesel and just add their own diesels putting subaru back into the situation they are now (good cars, but their fuel economy isn't as good as the competition because they are heavier due to the AWD).
I guess I don't know what the solution is, but the status quo isn't good enough. I know that Subarus are great cars, and I would like them to succeed, but they cannot just stay the course. Hopefully the next gen legacy will address some of the space concerns (though hopefully the cars will not grow to be as large as the new accord, I think that by 2010 that may be a mistake as well if fuel prices continue to climb) . Hopefully they can also introduce a version of the all electric car, and maybe some other models in North america (and yes if they want to not be accused of hypocracy they will need to be AWD for better or worse).
Since I can't even recall adds for any model beside the WRX in the last few years, I would have to say their marketing isn't really working, and maybe the majority of the people don't even know/care that all the models are AWD, and they could easily go back to offering FWD versions of the cars.
(on another note subaru really didn't make cars that many people thought were good looking unit the last two gereation legacies, up unitil then (and even now to some point) they have always been considered quirky looking (though personally I like the cars from the eighties till now).
Let's just hope that Subaru considers all the options (including yours and mine) and comes up with the right way to progress for them so that we will still be able to have to choice to purchase one in 10-20 years time.
Scott

varmint

Aside from quirky styling, the other important driving force behind Scion is price. Subaru's cost too much (costly boxer engine, costly AWD). About the only Soobs that would make the grade are their mini cars. Since Toyota already has those (without the need for a reskin) why would they use Soobs?

ateixeira

First let's look at Scion.

They have seemingly low prices, but remember consumers buy them for MSRP. The xB is over $16k msrp before any options.

The Impreza 2.5i sells for around $16k with AWD. Keeping in mind that the Scion could be FWD, that could bring prices down, right in line with the Fit, $14-15k. And you'd be getting a bigger vehicle.

Toss in boxy Scion styling, voila.

Yes, AWD competition will squeeze Subaru, but Subaru is still the best at affordable AWD, they just have to market it better.

Nothing in the GM parts bin fit! It was as simple as that. They sold a Chevy Forester in India and a Saab 9-2x here. Subaru sold a Traviq in Japan that was an Opel Zafira minivan. They had to settle for complete re-badges because nothing fit!

I don't see how it would be different with any Toyota. I believe they're going diesel because they couldn't even find a way to mate HSD.

Maybe, big maybe, if Toyota designed the next generation of platforms to be flexible enough to accomodate the Subaru powertrain...a Subaru Sienna? Toyota could stick to FWD only and sell a version of Subaru's powertrain. They'd have to plan several years ahead, though.

no good reason to buy a Legacy (other than AWD).

Well, AWD is the essence of Subaru. That's like saying Volvo is nothing if it is unsafe. It *is* nothing if it is unsafe. Just like a Porsche is nothing if it does not perform. Or a Mercedes without luxury is pointless (why the A-class failed). In your case, it would be Honda without the Honda motor.

Imagine an S2000 with, say, an Ecotec. Aye carumba, like a blender chopping walnut shells.

Every time you say "FWD Subaru" it's about as painful as it would be for you to listen to an Ecotec thrashing in the engine bay of an S2000.

ateixeira

I didn't mean to put words in your mouth, I'm just responding to ideas the whole group has put forth, many not yours. Sorry if that wasn't clear.

Yes, growth came from the Outback and later Forester, but AWD was the essence of their image and marketing campaign. If you recall every ad had the car driving out in the bush, demonstrating the AWD system's capabilities.

why would the scion versions be successful if as subarus they can't be successful

Good question. Toyota has more dealers, for starters. They can advertise a low price - 170hp for less than $15k. The Subaru would be $19k, discounted, but that doesn't grab your attention the way a $15k MSRP would.

Finally, I think they should have boxy styling that would draw attention. So not just a re-badge, but rather a unique vehicle on that platform. Toyota is very good at differentiating vehicles on the same platform. The Matrix looks nothing like the Corolla. Do the same for the Scion Subaru.

Subaru is testing two R1e pure-electrics in NYC right now.

Another shared car would be the rumored Celica replacement. A RWD Celica based on the WRX.

I guess a lot of people in this thread are assuming Subaru has to grow, and sell in more volume. I don't think that's the only way they could become profitable.

paisan

I figure if GM can build a competitive FWD car to go head to head with Toyota and Honda, then so can Subaru. You can say that GM has huge economies of scale, but Subaru had access to the GM parts bin for years. They elected not to use them. Now they have some access to Toyota's! Furthermore, while GM has huge economies of scale, they also have huge debts. They had to sell off Subaru in order to keep afloat.

Haaaaa, you are funny, you think that the street was a 2-way street with Toyota and GM? The parent dictates to the child company what they get and what they don't get. FHI did not have access to GMs parts bin in any size shape or form. Same goes for the Toyota bin. They can't just call up toyota and say "Dude send us over all your cheap parts so we can put em in a Legacy and outsell your Camry!"



-mike

paisan

As for a larger outback, I'm not sure if I put it in my post, but for those who want a carish based outback, there would be the Legacy Wagon. Car heigh, handling, etc. The Niche Outback wagon would be significantly higher, 4-low, etc. although it would have the same essential body as the Legacy wagon version. It would create a niche market (small market) that isn't hard core off-road like (H3, FJ, Exterra, Wrangler, etc) If anything it would compete with the Liberty, Compass, Patriot market. It would also cater to the outdoorsy folks and could be really loaded up with outdoorsy options. (Water repellent seats, rubber floor, all kinds of things that out doorys folks like)

-mike

robr2

As for a larger outback, I'm not sure if I put it in my post, but for those who want a carish based outback, there would be the Legacy Wagon.

Well they've dropped the Legacy wagon in the US - why would they bring it back?

varmint

"Haaaaa, you are funny, you think that the street was a 2-way street with Toyota and GM? The parent dictates to the child company what they get and what they don't get."

Apparently not. I think it was Nippon who posted an article a while back describing how GM couldn't get Subaru to make any compromises. It was Soob who refused to do business.

Furthermore, Toyota is one of the companies that is well known for sharing technologies, production techniques, management strategies, etc. They are one of the few companies that helps suppliers and partners become profitable so they can be of greater assistance to Toyota later on down the road.

Someone has misinformed you on this one.

varmint

Juice, I'll have to get back to you. Gotta go...

In short, your Imprezza shaves costs by eliminating AWD, but adds them back in when they reskin it. All that work to create the xD they already have? Maybe, but I doubt it.

IMO, your AWD Celica idea makes more sense.

paisan

As for a larger outback, I'm not sure if I put it in my post, but for those who want a carish based outback, there would be the Legacy Wagon.

Well they've dropped the Legacy wagon in the US - why would they bring it back?

Well this is a proposal, not a "rumor" it's a proposal for making the outback wagon a niche, high profit, rugged off-roader, in which case they'd need a legacy wagon for "pedestrian" use.

-mike

paisan

Apparently not. I think it was Nippon who posted an article a while back describing how GM couldn't get Subaru to make any compromises. It was Soob who refused to do business.

Furthermore, Toyota is one of the companies that is well known for sharing technologies, production techniques, management strategies, etc. They are one of the few companies that helps suppliers and partners become profitable so they can be of greater assistance to Toyota later on down the road.

So Toyota is going to just give Subaru the technology to out-sell their bread and butter Camry? That would be a very poor business decision, considering they only own 8.X% of Subaru.

-mike

nippononly

Look at Subaru's production capability. The chances of them "outselling their bread and butter Camry" are slim to nil.

Having said that, I think it would be fine for Subaru to stay "AWD, all the time" if only they could get the fuel economy up. Way, way up.

Having had two Subarus I liked a lot in the 90s, I traded away from Subaru because I wanted a truck, and Subaru didn't build one. Every time I have come back to the Subaru brand, something has held me back. Now that I am once again interested in an AWD car, Subaru would be my first choice but the low mileage is keeping me away for the time being.

One other thought: there has been a lot of talk in the last 100 posts about lessons learned from the early 90s. Learning lessons is good but they must be context-specific. The 90s had $1 gas, the present has $4 gas. This has caused automakers that needed to learn no lessons from the 90s to reconsider their product offerings. The same must happen at Subaru. Heck, everyone in the market for a car is suddenly having cause to rethink their "bigger is always better" philosophy. AWD cars and larger and larger Subaru models may be the traditional ways of grabbing more market share, but tradition is getting turned on its ear a little bit marketwide these last couple of years.

paisan

They don't have the production capability to outsell a Camry, however Toyota does not want them to take any of the Camry sales away.

As for milage, AWD in the sense of a true AWD, not FWD til there is slippage setups, will always due to the limits of physics have a worse MPG rating than a FWD or FWD/Part-time AWD system. It comes down to how much is your safety, handling and enjoyment of driving worth in terms of the milage hit?

I also had to leave for a truck (04 Armada) but I use it to tow my Subaru Race car

-mike

jeffmc

There are ways to compensate for the AWD's MPG... Subaru needs to be industry leaders in aerodynamics, use of lightweight materials, and high-efficiency drivetrains. If they can do this and keep costs relatively low, we can have our AWD cake and eat our FWD MPG too. They've already done a very good job minimizing AWD's negative effects on MPG, IMHO (look at the AWD competitors!), they may possibly be the best at this. They need to be sure to keep innovating in those areas and keep ahead of the curve, which is difficult for a company to do with a small R&D budget.

Can't wait to see the effect of bringing direct injection, diesel and electric options.

paisan

Correct, however no matter what advances you make in terms of weight, aero, drive-line loss, they can't beat physics in that if you disconnect 1 of the drive-axles/wheels, you WILL get better milage.

-mike

jeffmc

No argument from me there.

ateixeira

In short, your Imprezza shaves costs by eliminating AWD, but adds them back in when they reskin it. All that work to create the xD they already have?

Does it? The Matrix is a reskin and it's not expensive. Toyota is really good at making a clone of the Corolla look nothing like the Corolla, and for peanuts.

The current xB is too close in size (good point), but Scion customers hate it. The idea would be to shrink it back down to the size of the original, under 100" wheelbase.

And I mentioned it earlier, but I repeat this - the idea would be that model would get the PZEV engine only. That way Toyota could play the green angle, which they do so beautifully that everyone forgets they sell more pickups than hybrids.

IMO, your AWD Celica idea makes more sense.

I can't take credit for that as this has been a persistent rumor. Ironically they're talking about removing a drive axle, but in this case it would be the front, so they'd have a RWD Celica, like the one way back when, late 70s IIRC.

Realistically, it's doubtful they'd do both. RWD and FWD starting from the same AWD platform? One or the other is more likely, but I'm just brainstorming here.

ateixeira

I asked about this and all I got were crickets chirping.

Any how, I think Subaru offers more than just AWD. I thought about this over the last couple of days, and came up with 3 main things:

* AWD, of course
* reliability
* safety

I don't know if the 2nd and 3rd items are enough by themselves. Volvo owns safety as an image. It would be hard and costly to pound that in to people's heads. Plus it seems like every Kia nowadays gets 5/5/5/5 stars. Subaru stands out with IIHS tests, but how long before everyone catches up?

Reliability has been good, especially after putting the head gaskets and wheel bearing issues behind them (for the most part). This is also a risky strategy, though. People will ask why they don't have an uber-warranty, if they believe it so strongly. CR puts them 2nd overall, behind Honda, but that changes every year. And the first issues that comes along could spoil the whole effort to build up that image.

It's tough to abandon AWD as their image. I don't see how the other two angles would be any better or easier, in fact I think they would be harder.

stever

A lot of people associate Subaru with Outbacks and Legacy wagons. When someone tells me that they have a Subaru, I immediately assume they also have an Outback or maybe a Forester.

I think the practical square box crowd outnumbers the WRX/Tribeca crowd.

If I'm right, the new (but still practical looking) Forester will blow the doors off Tribeca and sedan sales if it's priced right (i.e., cheaper than a CR-V or a base Outback - and the word is that it'll start just under $20k).

zman3

Reliability has been good, especially after putting the head gaskets and wheel bearing issues behind them (for the most part). This is also a risky strategy, though. People will ask why they don't have an uber-warranty, if they believe it so strongly.

That is actually a good point. My two OB's have been poor as far as reliability. My 98 had head gaskets and piston slap. My 06 3.0R just had a new transmission put in at 30K. My next vehicle most likely will not be a Subaru, but a Hyundai like warranty would potentially sway me.

dino001

I had my share of issues on my WRX, too: transmission rear shaft leak (took 3 times to fix, 20-30K), AC leak (40K), transmission gearset change (60K), head gasket and radiator (70K) - all paid by warranty (original or extended) or their "goodwill policy", whatever that meant - they blamed tranny wear on me, but we all know '02-'03 had inferior gearsets; I bet they had tons their "goodwill" repairs, but it allowed them to keep lower warranty repair stats so they could avoid service actions/recalls. I also needed new clutch at 70K, discovered during the head gasket replacement (I don't drive really hard, my brakes lasted 60K and were changed because of rotor warping not pad wear).

When I think back, I can't believe I still love my car. :surprise: After this experience I kind of understand VW/Audi/BMW crowd, willing to forgive bascially everything, just so you can drive your anti-Camry/ES350 I would definitely say, give me at least 50K bumper to bumper and 100K powertrain and I may take that Outback XT (or better - new Legacy wagon), even if not exactly fitting my preferences. BTW, longer warranty would also get them closer to "upper market" area they covet so much. It would be nice to have one clutch change warranted within the duration mfr/extended warranty - cause yes, it is wear and tear, but clutches should last 100K under normal driving conditions.

paisan

I also needed new clutch at 70K, discovered during the head gasket replacement (I don't drive really hard, my brakes lasted 60K and were changed because of rotor warping not pad wear).

You answer your own question here. You should use your brakes more often than your clutch to stop you. 70k is not out of the ordinary for any subaru clutch. 70-100k is the norm and I've seen 100s and 100s of subies get clutches done.

-mike

dino001

Yeah - that clutch was not a big surprise to me - call it slight disapointment. I was hoping for 100k or so, to be honest. When they caugth it it probably had a few thousands less, but since the engine was out they were good not to charge me labor - just part plus flywheel labor. Still 900 bucks .

I also remember my spark plugs costing me $250, which was quite a shock. Of course, considering where they are placed, it is not such a surprise. However, since most mfr. have not 100k recommendation, rather than 60k, they could do something about it.

I remember Juice or Bob arguing with me about operating cost of WRX vs. Civic. They yelled at me when I said it is about double of that of Civic. I maintain my assessment in long run, after my experiences. I bet a manual Civic would not need clutch so quickly or its spark plugs would not cost as much. I may be wrong, of course, I I don't think I am. Double is a very good number - conservative perhaps, but good to think about before one jumps from econobox to something like WRX. I still love it - but one needs to be able to pay for that stuff. Anyway - it was a side comment. Lets go back to sinking fortunes :P

ateixeira

You're preaching to the choir, here, given I'm a huge wagon fan, the boxier the better.

I don't think an all-wagon strategy would thrive in the USA, though. Plus they dropped the Legacy wagon, and the new WRX 5 door is more of a tall hatch. They seem to be moving in the other direction.

The 2009 Forester is out already. It does start at just under $20k, perhaps due to price pressure from newcomers like the Rogue (also starts under $20k). They did drop some accessories that used to be standard (mud flaps, fog lights, cargo liner, cargo cover, etc), but that was probably to match their competitors' price points.

4 people have reported buying one, so sales seem to be off to a quick start.

varmint

"So Toyota is going to just give Subaru the technology to out-sell their bread and butter Camry?"

Yes. Although, as Nippon pointed out, "out-sell" is pure fantasy.

Toyota gives Subaru whatever they need to sell a competitive mainstream family car. For the sake of argument, we'll say Subaru gains 80K units per year selling this new vehicle. I'll be generous and say that 30K of those are lost Camry sales. The other 50K come from the pockets of Nissan, Honda, GM, Ford, Hyundai, etc.

Toyota gains...
1. Oh, I dunno... a new Celica.
2. Profits from selling parts to Subaru.
3. A stronger partner that now has the money to spend on Li-Ion R&D, production, and whatnot.
4. A partner with greater flexibility for the next move Toyota wants to make.

ateixeira

In the medium- to long-term, I can imagine designing a platform with Subaru's powertrains in mind from the beginning.

If they do, then I could imagine a Subaru minivan based on the Sienna, or a large sedan based loosely on the Avalon (very loosely).

They can also share things like HVAC, audio, GPS, DVD players, etc. Things that really don't affect the driving character of the car much.

And to be honest, areas where Subaru has fallen behind.

There are many ways they can use Toyota's economies of scale without losing their identity, IMO.

varmint

Along with Nippon's comments about Subaru successes in the 90's, we should address the failure of FWD in the 80's.

What I've been suggesting is not the 80's strategy. That is a false analogy because the conditions today are not the same. What I'm suggesting is the progression every mainstream manufacturer follows when they enter a new market.

1. Exploit a niche to gain a foothold.
2. Turn that foothold into launching point for new (non-niche) products.
3. Take on the established market leaders.

Subaru seems to think (and the fans here follow the word) that producing something other than a symmetrical AWD vehicle will be the death of them. Historically, I cannot find a precedent for that.

Selling cars has not hurt Honda's motorcycle business. Selling the Tundra, Landcruiser, and Avalon has not hurt Toyota's fuel-sipping image. Hyundai's new V8-powered GT and luxury car shows no signs of damaging the reputation of their inexpensive offerings. Adding the sporty IS cars to the line-up has not hurt the image of the posh cars at Lexus.

I don't see anyone talking about removing AWD as the focal point of Subaru's image. We're suggesting they build on it.

Subaru made a name for themselves in the 90's with the Outback. They painted everything on the salesfloor in LL Bean colors and installed lots of plastic cladding. They continued this all the way up through the introduction of the Baja.

Earlier in this decade, Subaru scored again with the WRX. They added turbos and rally-car fog lights to everything.

Each time Subaru does something right, they jump into that niche with both feet. They've succeeded in achieving step 1. Instead of moving to step 2, they repeat step 1 over again. The first time I saw tract-housing when I was a kid, I told my father the architect had a stammer. Subaru is like that.

In the 80's, Subaru attempted to go head to head with Toyota and Honda without first establishing themselves. They did it without a brand identity and they did it without compelling cars. I have experience with several (4 early 80's compacts and an 87 Leone wagon). They were plastic-riddled, uninspired, and not especially reliable.

That is not true of the cars they produce today. Subaru has an image and they build good cars. These are not the same conditions as Subaru experienced in the 80's. They've come a long way. If they move fast (and don't stick a foolish-looking nose on their products) they can still capitalize on their successes. If not, they will either get overwhelmed by invading competitors, or have to start all over with another new niche.

ateixeira

Your examples are very different to me.

Honda's cars didn't detract from Honda's motorcylces. Heck, didn't the 600 basically use a motorcycle powertrain, chain driven and all?

They expanded on the success of their bikes, using ... their bikes!



So Subaru is supposed to expand on their AWD success, by dropping AWD as a standard feature? How is that the same?

New motto: AWD is no longer standard, and we're hoping noone notices!

The Hyundai example is backwards. We're talking about Subaru lowering prices with FWD. Adding is one thing. We're talking about taking away their primary strength. The Genesis is still more affordable than the cars it competes with. Same strategy, new segment.

A better example would be Mercedes. They came out with the A-class and it failed, because it took away the one primary Mercedes strength: luxury.

Toyota earned their green image with the Prius. By then the Avalon, Tundra, and Landcruiser were already well established. They want to build a fleet of hybrids, and they may not even use the Toyota brand name! They'll all be called Prius.

But the fundamental disagreement I have with your post is that you assume that Subaru has to grow and take on the market leaders. I don't think they have to grow. Using some of the suggestions I've mentioned would allow them to remain small yet still be profitable.

kyfdx

From outside the club, the problem seems to be:

How do you attract new buyers that aren't already Subaru fans?

A certain number of current Subaru owners are naturally going to quit buying Subarus.. (I know, hard to believe).. How do you attract replacements?

If you don't consider that a problem, and Subaru doesn't consider that a problem, then eventually, you'll have one small club..

ateixeira

It's tough. People asked for more refinement, and got it, yet the old school Subaru fans are complaining loudly. Where's my edgy WRX?

The same people that complained about wind noise and a harsh ride and now whining that the new one is too civilized.

The good news is that what may be seen as a bad thing on the WRX will not be seen as a bad thing on the Forester. Or the Legacy. Or the Outback. Or the Tribeca.

Their new direction makes more sense for all other models.

What's going to happen is that the new Forester will go back to outselling the Impreza 3 to 1. Watch.