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Subaru's fortunes sinking - can they turn it around?
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It is true that since Subaru is small, they have alot of development costs compared to potential returns. From my time dealing with Subaru they generally are pretty cautious about trying new and untested ideas.
Subaru seems to be able to put the right systems together efficiently and make a first rate product. They are very demanding in their quality and it shows in the end product.
When I say "Volvo" what's the first thing that pops in your head? Safety.
no, over priced ford is the thing i think of.
When I say "BMW" what do you think? Ultimate Driving Machine.
no, hans the machanic aint cheap is the first thing i think of
When I say "Mercedes"? Luxury.
no, i will be putting fritz the mechanics kid thru college.
Volvo XC70 2.5l turbo 208hp EPA 19/26
MSRP 36080
Volvo V50 T5 2.5 turbo 218hp EPA 19/26
MSRP 30080
Audi A4 Quattro 2.0 turbo 200hp EPA 22/30
MSRP 32370
BMW 325xit 2.5 n.a. 184hp EPA 19/26
MSRP 33645
Jaguar X-Type 3.0 n.a. 227hp EPA 18/24
MSRP 36995
Mercedes C240 2.6 n.a. 168hp EPA 19/25
MSRP 36070
Saab 9-5 2.5 turbo 220hp EPA 19/28
MSRP 37770
Volkswagon Passat 1.8 turbo 170hp EPA 21/30
MSRP 27745
Subaru Outback Limited 2.5 n.a. 168hp EPA 23/28
MSRP 27820
Subaru Outback 2.5XT 2.5 turbo 250hp EPA 19/25
MSRP 28820
Ford Freestyle SEL 3.0 n.a. 203hp EPA 20/27
MSRP 28915
The Outback looks very competitive to all of these other cars, not only in fuel efficiency but also horsepower and price. Let the numbers speak for themselves.
Interesting ... total car sales 2004 was about 7.7 million. Truck sales, about 8.5 million.
% of TOTAL market for Subie - 1.1 %
% of CAR market for Subie - 2.4%
% of TRUCK market for Subie - 0%
The truck segment includes p'ups and SUV's. That segment has grown tremendously over the years because of SUV's . I think you can make a case for Subie is growing in the car market, but has zero growth overall because of lack of product in the truck sales segment. This should change because of the 'beca, at the possible erosion of car market share due to folks upsizing from Outback, Forester, etc.
So do I! I just checked some weight figures for the 2005 models from the SOA site and they come up like this (All with automatic):
Impreza wagon - 3110 lbs
Forester XS - 3195 lbs
So the taller, boxier shape of the Forester results in a negligible weight gain.
The 2005 Outback 2.5I weighs in a 3355 lbs. It seems to me that a Forester-type body on the Outback platform could come in at well under 3500 lbs. I think that a 2006-version 2.5 engine or a low-compression, regular gas version of the 3.0 H6 coupled to a 5-speed auto could do a creditable job of hauling such a vehicle and be much more satisfying that a 4 cylinder Toyota Highlander and still cheaper that the same Toyota in its 5 passenger, AWD, v-6 versions.
I am sick of american cars & spending money constantly for repairs. Have read about Subarus & they seem to be very reliable. Any opinions or advice. Thanks
It may not be a problem, but it sounds like your son may also be adding a lot of miles to it. You say he's driving to Alaska from NY. Does that also mean he will be driving back and forth too? If so, that will really pile on the miles to an already high-mileage car.
Bob
mayberryguy: good post. :shades:
If you look at the Forester is does even better, because it's competitors are even less fuel efficient than the ones you listed.
The 2006s are about to come out so that could be a 3 year old car. That puts the pace at 26k miles per year. Hefty but possible, in fact paisan probably drives that much every year.
2003 is a good used model, we haven't really seen any one sore spot in terms of problems. Make sure the 30k and 60k services were done. Timing belt is only due at 105k miles.
-juice
I just took a glance at Sube's "record year" in 2004, and discovered they sold precisely 583 more vehicles in 2004 than they did in 2003. Yes, it is a record in the technical sense, but the market grew some 3% in the same time. That gain of 583 came on a 2003 volume of 186,819, so it represents about a 0.3% increase for Subaru. Or in other words, it lost market share, but because its overall market share is so small, it doesn't show up in the x.x% figure usually quoted for auto companies' market share.
Any year you sell one more car than last year can be a "record year", but it is not necessarily a record that means much. Now to see whether Tribeca will sell as its fans think it will, because I think it needs to. Certainly the new Legacy is close to being a year old, so just as every model does, it will begin to cool in sales, hopefully to a pace it can maintain for a good two or three years. It would be very good for this to be a year where Sube's sales growth keeps pace with the market at large.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
-juice
No way, no how they are going to be able to sell 6 more Baja's this year. :P
The article speculates that Sube designers put *that nose* on the car as revenge against GM for forcing them to sell Tribecas to Saab to be 9-6s. The article also wonders out loud if *the nose* might look better on the Impreza this August, and why it took so blazing long for Sube to make the obvious progression to a larger crossover.
I don't think *the schnozz* will look any better on Impreza than the froggy eyes of 2001 did. I shudder to think they will apply this look to the Forester in a couple of years - Forester has become Sube's best-looking model IMO.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Then there was the article about GM wanted a platform that would fit a diesel, so who knows?
Autoweek did say something interesting - the truck-based luxury SUV market is way, way down this year, so perhaps the Tribeca can capitalize on some of those customers that are downsizing a bit.
In that manner their timing was good.
Impreza pics are out, check Subaru Crew - Future Models. Looks OK but I wished they went further, and really committed to the new look. They went only about half way.
-juice
FWIW, I expect that Tribeca will expand Subaru's marketshare. Auto journalists in the past have written that 1 point in market share is worth about 100K units. (It's probably more today.) With an additional 40K units going out the door, Subaru could make 1.5 or 1.6%. My question is whether or not having 5 models for such a small piece of the pie is a good strategy.
I think the trick is making those sales additional. Subaru has done very well (surprisingly well) with keeping their products from cannibalizing other vehicles on the lot. Here's hoping they can do it again. The Outback/Legacy combinations are up 11% YTD versus April of last year. (I haven't seen May.) That's a decent boost for the new model. But others in the crossover segment have posted 7%, 16%, and even 34% boosts without redesigning their vehicles. Did the new Outback provide a big push, or is the overall market up? If it's just the market doing its thing, cannibalization could be an important issue.
BTW, your opinion on what Subaru could/should do kinda got lost in all the shouting. What would you like to see?
I have no need for one, but I need to swing by the dealer and check one of these things out.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
In theory, this would be the peak year, first full year of availability with a fresh design. Last year they were selling an old model for a big chunk of time.
A gain of 583 is indeed not a gain nippononly, it's flat. But it's not a loss, either.
-juice
Tribeca's timing might have been even better if it were already an established model with a couple of years in the market at this juncture when luxury SUV buyers are looking for crossovers instead of BOF trucks. But as long as Sube really papers the town with advertising for it so that people know of its existence when it comes shopping time, the timing might still turn out to be OK.
I noticed in that article that Sube has provided a 0-60 time of 8.5 seconds. The H-6 in this application has only the same amount of torque as the last-gen 4Runner, which also weighed less and was always called slow. It is down 110 lb-ft, 20 hp, and two cylinders on the like-priced V-8 4x4 4Runner SR5, for about the same price. But it does have a three-point fuel economy advantage (four points highway). I want to see a back-to-back comparo between the Tribeca and the 4Runner Sport (same price as Tribeca for the V-6; $1500 extra for the V-8) that includes some slalom - I am curious as to whether the Toyota's XREAS cross-linked sport suspension gives it better or worse handling than the Tribeca, since Tribeca's claimed trump card is the handling.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Things go in cycles, up and down, 2003 was an up year and 2004 held steady at the peak. That's not bad news.
4Runner costs a fortune once you equip it properly. Much more than a similarly equipped Tribeca. It competes well for what it is.
-juice
SUVs is too broad of a catagory to directly compare different models. Kinda like comparing a Corolla and a TL because they are both 4 door sedans.
2020 Acura RDX tech SH-AWD, 2023 Maverick hybrid Lariat luxury package.
I have not driven a new 4Runner, to be honest, but given the gas mileage and the price of a well-equipped model I don't think it would matter how much I liked it otherwise.
For reference, a 4Runner with heated leather, DVD, and Nav, priced out to $44k using my price book. Tribeca is $38k. Even the Highlander is $39k.
Not to mention 4Runner is not a luxury SUV, the GX470 is.
At least resale is strong.
-juice
The 4Runner Sport drives like a big car, that much I know, I have driven one. No keel-over-at-every-turn truckiness to it with that cross-linked suspension.
The 4Runner does not have a moonroof, power front seats, or side curtain airbags at that price. But it is the more spacious, powerful vehicle. Add $2000 to make it comparably equipped. What it does have over the 'Beca at that price are better ground clearance, a locking Torsen center diff, higher towing capacity, and even skid plates if you care.
Again, if 34K Tribeca sales per year will satisfy the accountants at Subaru, then I think there is not much to worry about. But it is my thinking that any year your sales are flat in the car biz is a year your market share shrank, and once it shrinks enough, you become the next logical guy to be squeezed out or bought out.
Varmint: I think for starters it is vital they have three sizes of cars - Mazda has the same problem in not having a wide enough line. They probably should also have three sizes of crossovers too, since it is unlikely they will ever have BOF trucks. Minivan, I don't think so, better to do the large crossover. Tribeca can be your minivan. I made the argument before that AWD sells and the Sienna seems to sell well in AWD, but unless they could do one with the same kind of volume forecast as Beca - say 30K per year would justify the costs - it is better to stay away.
If the Ridgeline really takes off (which I don't think it will), maybe in a few years they could do a Tribeca-based pick-up. In the meantime, one more model beyond the six or seven I just mentioned would do it - and since STi is almost a model unto itself, maybe that is it.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I know, I was just thinking that in general BOF SUV sales are down this year, so I threw them all in one pot! :-P
Juice, I know you are very confident of Tribeca's ability to compete at the $40K range with luxury SUVs, and while I disagree (because of Sube's brand stigma relative to marques like Volvo, Acura, and Lexus, not to mention BMW), I think anyway that the lower-end models are going to be a lot more important to the overall sales. The Becas priced $31-35K sticker are going to foretell the fate of the model, not those super-equipped ones. That is where people shop other cars in this class. The $31K Sport is the most-shopped 4Runner, not the Limited. Likewise for the Highlander. Now, the Pilot only has two trims and I don't know the mix as to whether or not its sales follow this trend. But certainly vehicles like the Explorer and Freestyle do. And Explorer was the number one seller in midsize SUVs through last year - who knows what this year will show, but people have spoken with their wallets as to where in the price range the family set is shopping.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Just lean on Tier 1 suppliers as mentioned above to spread the costs around.
You can offset some of the economies of scale the bigger guys enjoy by remaining more nimble, i.e. quicker changes, adapting new technologies.
The real obstacle is the conservative corporate nature of FHI, SoA is repeatedly denied many special edition models for instance. And technologies that appear in Japan don't get here until several years later. This is the biggest market so they should come here first!
We tend to get them last.
Subaru has to be careful not to increase their fixed costs too much. Grow slowly and make sure those sales are sustainable.
-juice
Honestly I see the bulk of these selling in the low 30s, if I had to guess a median price would be around $33k. I mentioned this earlier - but my dealer didn't have any price over $33k, no DVDs or NAV yet.
They positioned themselves as an "inbetweener", but really if you look closely the equipment levels are pretty comprehensive so it'll go head to head with a loaded Highlander Limited and Murano SL.
-juice
Juice - I know that last year they were selling the old model. That was kinda the point. Obviously, the new model is selling much better than the old. That is expected given that, during those months in 2004, the OB was short-timing it (and sales would be naturally low). It happens with most every vehicle.
My question is whether or not the increase is due to the revision of the car, or if that increase is a result of cross-overs being up across the board. Several other cross-overs are up double digits without a redesign.
Call it a "missed opportunity". I doubt Subaru will get bought up or squeezed out. But they may miss more opportunities because of a lack of capital. Things like hybrid programs, safety systems, telecommunication devices and such may suffer as a result. Or perhaps they'll have to take what GM hands down to them.
By 3 sizes of cars do you mean compact, mid-size, and large? Personally, I don't see Subaru with a large car.
FWIW, I don't see the Ridgeline taking off, either. Buyers will make the transition gradually. The Ridgeline is a toe in the water (though an important one). Luckily the company has the scratch to wait it out. For that reason, Subaru should not jump into the same market. Being small may allow for them to be nimble, but it also means they cannot risk expensive endeavors.
In defense of my suggestion regarding a minivan, I'm thinking the minivan market is still larger than the mid-size SUV market. A 1% share in vans would result in more sales than a 1% share of SUVs. Pretty much all of the cross-overs are AWD, there are more and more AWD sedans, but still only a few AWD minivans.
I think the crossover segment will continue to expand. There are new competitors that simply didn't exist before. Holding steady is not necessarily bad when the segment is still growing.
Funny thing is, from a business perspective, you're supposed to worry when you get an increasing share of a segment that is shrinking, i.e. the opposite case.
That makes the minivan segment risky, because it probably peaked a while ago. It's also ultra-competitive, with tons of innovation, and would require a large investment were Subaru to enter. Very risky.
Perhaps they can play at the fringe of that segment, a roomier Tribeca that still seems more like a crossover than a minivan. Maybe even without sliding doors? Not sure.
-juice
By the same token, they could put a crossover on the standard Legacy platform, which would fall between Tribeca and Forester in size. Give people options that don't cost much to engineer...
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
B9 is the platform so if it shared that platform it would be "B9 Legacy" if they continue this naming convention and use Legacy in the name.
Make it FWD and they ought to call it "B9 Lunacy".
-juice
How about the B9 Traverser? Just B9 Cruiser? Or is that patent-infringingly close to the PT's name? There is a Land Cruiser also, after all. I like B9 Cruiser - a good name for a larger car.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Some reviews are already comparing B9 Tribeca to minivans and complaining about the lack of interior space, rather than comparing to other crossovers, so I think there may be room for a serious Subie people-mover, though it'd have to have a special twist to make it unique... maybe the AWD & boxer combined with a super interior would be enough. If you think B9 Tribeca handles well, imagine what Subaru could do with 2-3" less ground clearance... they'd eat other minivans for lunch.
Anyone else want to see the pop-up frosted glass roof from the B11S concept make its way into production on Tribeca or some other model?
Regarding Subaru's fortunes, FHI's aerospace branch received good news recently when they were selected to be a supplier for Boeing's new composite-material jetliner, the 787 Dreamliner (Hey, that sounds like Subaru nomenclature, and like Subaru, they had a change of heart when naming it, as it was previously called 7E7)
-juice
jeffmc, YES, more back seat room, EXACTLY. Legacy is tight in the back, Impreza's back seat is pretty much for children only. Coupes like the Civic have more back seat room than Impreza. So I would say there is lots of room in the line for the "B9 Legacy". With that wonderful 108" wheelbase.
I still think they should do at least an "Outback XL" on this platform if they do a "B9 Legacy".
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I had a chance to sit in the B9 Tribeca. Now I'm 6'3", and stunningly enough, I was able to sit in the back seat(the 3rd row seat) and be comfortable. Now I know that rear-seat legroom has always been the issue with Subarus, so it's good to see that they are actually looking to improve this.
A longer wheelbase Subaru? I don't know if that will help the company. Friends have told me they looked at Subaru as opposed to say longer-wheelbase cars because they want to be able to fit it into their garages. Just my 2 pennies . . .
BTW, I have an '02 Forester L which I live by. I can't wait to see the new Foresters come out!
In GM's on-again, off-again saga for the 9-6x, it is now back on, reports Edmunds. GM's last press release had mentioned they wanted a diesel for Europe, so Saab was supposed to use the Vue/Equinox platform (the Vee configuration mating up to existing diesels). But they changed their minds again, and now say they'll use the Tribeca platform.
I wonder if they were just waiting to see how well the initial reception would be?
Or perhaps Subaru is further along than we thought on the development of its diesel powertrains? Hard to squeeze a long-stroke boxer into an engine bay when it's laid out longitudinally.
Can't find the link this morning. Haven't had my coffee.
-juice
I can definitely see Subaru attracting some extra customers with a more spacious sedan or wagon. I have mixed feelings about whether they should add something a bit larger than the Legacy, or if they should just make the Legacy bigger. They will lose some sales by enlarging the car, but the gains might be worth it. Although platform-sharing will help reduce costs for an additional car, designing it, maintaining parts for it, and marketing it will increase costs. That's a tough call.
If Subaru does a big sedan it would likely be US only, or at least primarily targeted for the US.
My wife actually likes the Avalon (yawn) so she'd probably be into it. I doubt it would be quite that big, however.
-juice
Juice is right about the Legacy (and Outback) being a world car, so I don't think we'll see that grow much. The sedan's dimensions are actually almost identical to the Acura TSX, AKA the Euro-Accord.
Bob
-juice
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At least with the Accord, this generation is the first to deviate from the world car idea. The previous generations of Accords were the same around the world.
IMHO, Subaru should introduce a bigger legacy if it wants a bigger piece of the sedan pie. NA is the biggest market in the world - we folks in marketing typically try to sell what people are willing to buy.
Usually we're stuck selling whatever engineers made - very elegant products that are destined to fail because only other engineers appreciate them.
Hopefully marketers are at the helm.
A real marketer can sell Frigidaires to Eskimos
That would be a schyster. Marketers are more than advertising and sales. Remember marketing 101 - product, price, place, promotion!! Life is so much easier when you think of product first.
Which more or less explains why several companies have opted to create a version for the US, as well as one for the rest of the world.
I don't have numbers in front of me, but I'm guessing that Subaru sells twice as many Legacy/Outback products here in NA as they do in the rest of the markets combined. Which begs the question, why cater to the smaller markets?
About the only answer I can figure is that Subaru is trying harder to expand in those other markets than they are here.
I don't have numbers either but the picture is a bit different than many other manufacturers.
In many ways Subaru is unconventional so it's difficult to apply conventional thinking.
-juice
(from their web site)
2004 Legacy/Outback sales:
Japan: 73,676
US: 79,839
Rest of the world: 33,865
if I understand the numbers correctly.
So the US market brings in about 43% of the total
Legacy/Outback sales, not 66% as was alleged above.
Subaru sold 201,645 units of the Liberty, Legacy, and Outback worldwide in the 2004 calendar year. Of that number 89,453 of them were sold in the US. So, it looks like their overseas business does justify staying with the world car size.
**edit** Greenice beat me to it.
No wonder SoA has so little input into the process. Let's see if GM's man on the Board gives them a little more influence.
Then consider that Japan gets models that we do not get: R1, R2, Traviq, etc.
-juice
I got the total volume from this link. (I was searching an Aussie site for sales specific to that market... where they have a 4.2% share, BTW)
And the US volume here.
Don't worry - neither does Subaru's.