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And Subaru wants those customers that buy many more cars than folks like you and me (once every 7+ years).
Answer to #2: rebates are a slippery slope. They erode your image, residuals, and return customers.
If you pay $35k for a loaded Tribeca today, 2-3 years from now it had better be worth $25k or so, so the same buyer can afford to trade up to a 2008 Tribeca. If not they won't buy another Subaru.
-juice
Let's say you bought a 2002 Odyssey LX for $25 grand. Today it's worth $18 grand.
Beautiful. You trade it in on a new 2005 model and pay maybe $7 grand difference. You are a loyal Honda customer and will buy another one in 2008, another in 2011, and so on.
Over time Honda will make approximately one billion in profits from you alone. Strangely you will be extremely happy handing them over all your money continously for the rest of your life.
LOL
But you get the point. A high residual makes trading in for a new model affordable.
Now, let's look at Kia. Say you bought a Sedona in 2002. Huge rebates allowed you to get an EX with many more features for less money. So you only paid $20 grand, saving you $5 grand more than the Ody buyer.
Genius, right?
Today, you are screwed. Noone wants a used Sedona, even the 10/100 warranty shrinks to 5/60 when it's a 2nd buyer. You can't find a buyer at all, never mind the price, so your only hope is a trade-in. These vans wholesale at about $9 grand, so if your are LUCKY the dealer will give you $9 grand on the trade.
Now you cannot afford the new 2006 Sedona, because the difference in price is a whopping $11 grand.
So for now you're stuck with an old, mediocre van with poor mileage.
So Kia increases the rebates. $2000 cash back!
Still $9 grand. Remember, Honda cost you $7 grand to trade.
$4000 cash back!
OK, now you break even. But you waited for that huge rebate to buy.
Kia is stuck in this cycle.
Subaru should not play that game.
-juice
but was i suppose to follow the rest? cant we talk about bore and stroke again my head hurts.
well i think the moral of your story is not buy a crappy car, not the rebate problem. if you have a good car it will help the residuals.
BMW 7 series had a $10,000 rebate in the 90s and owners were fuming mad because resale value collapsed instantly.
-juice
I've seen Scion and Element concepts heavily customized for audiophiles. A production model would not have to go that far, but what about a Surround Sound DVD theatre? They could put a sub under the passenger seat so they felt any booms.
-juice
John
I just checked a bunch of zip codes (including some in CA), and in all cases there is only 1.9% financing on the Legacy-based Outback models (and the Legacy too). I didn't see any rebates. What zip were you using?
Craig
ps: they have had this same financing rate for a long time, at least for the past couple years. I think I got 3.9% over 60 months on my OB XT. Could have done 2.9% over 48 months, or 1.9% for up to 36 months. That was back in July 04. Nothing has changed since then.
The closest dealer to my house won't even put VDCs in stock. I wonder how many B9s they will order?
Dave
-juice
John
OUTBACK
1.9% APR FINANCING UP TO 36 MONTHS ON ALL 05 OUTBACK MODELS
Subject to credit approval, vehicle insurance approval and vehicle availability. Not all customers will qualify. Financing = $28.60 per month, per $1,000 financed. Cannot be combined with Customer Cash. Must take delivery from dealer stock by March 31, 2005. See participating dealers for details.
CUSTOMER CASH REBATE
Now through March 31, 2005 - select models are available with Customer Cash up to $1,000. You must take delivery from dealer stock by March 31, 2005. See your participating dealer for details.
2005 Outback Sport models $1,000
I hope the dealers get the right training. Sadly that's the area Patti just left.
VW was caught flat-footed, dealers had no idea how to treat upscale buyers.
-juice
Perhaps the long article in Consumer Reports this month praising stability control will make a difference. They even advised ORDERING a car if the dealer has none in stock.
Of course, that's no way to get a car at a good price.
Dave
It's a strange, strange system. Fitz lets you order for the same price margins compared to stock.
-juice
The mentioned two week shutdown is the last week of June & the 1st week of July. New 06MY launches end of May.
I agree that it is still a good sign that Subaru is not offering anything other than the relatively low finance rates of Leg/OBK but my contention was that they still over calculated the success of the redesign.
Initial sales estimates were given at 120,000 but will probably only hit 95-100k. That's a fairly big miss on projection. Also Subaru calculates their "sales" numbers as soon as the car is driven out of SIA into the SoA lot. That sometimes makes the sales numbers look artificially inflated.
The new LL Bean I was considering is for my wife. My biggest fear is that after 3 years she will want to trade it on something else and because of our proximity to SIA resale won't be that great. Subaru used values tend to be a little lower in our area because of the number of used Subarus available.
I love Subaru, especially the Outback/Legacy models. It has to be the best value going in it's segment right now. I can't think of any other vehicle with as much value for the buck, but that's only my opinion. I feel that Subaru needs to focus more attention on how far they have advanced their quality & performance.
I drove the very first 05 OBK XT M/T that the local dealer got that wasn't sold the minute it was unloaded off the truck. It is awesome. The main reason why we don't have one already is because this will be my wife's car and she wants an LL Bean but I haven't completely convinced her it is worth 30k. I think it is but it will be her car so there it is.
If it were my turn to buy a car right now we would have had the OBK XT the day I drove it but I'm not planning on buying a new car for me until 07MY. I am anxious to see what changes makes for 07 on the Outbacks/Legacy's. If not much else changes such as Memory Seats or Nav then I'll probably buy a 325xi...we'll have to see.
No, those are pretty accurate numbers from SoA. When the cars leaves the assembly line, it is SOLD. It is sold to the respective dealership that is
-Dave
Out of the people I know with BMW, Mercedes, Audis .... Saab, Volvo, I'd say 80% of the cars have not been a good ownership experience. I can't ever see myself buying a European car when there are such good choices from Honda, Toyota, Subaru, etc...
Craig
Thanks for the heads up on the BMW. I have also heard some complaints about the overall experience. I have driven one and I agree about lacking the power but the new 06MY will have about 215hp in the 325 if memory serves me correctly.
I agree with the not so great ownership experiences of the European brands right now but I think they are getting the wake up call. This is an ideal time for Subaru now that they have a foot in the door of the premium brands. I think if they can get people to actually come in and drive their cars they can sell. It's hard to drive an 05 OBK XT or Legacy GT and not walk away impressed.
Subaru needs to make sure that they maintain a high level of customer satisfaction & fun to drive vehicles for a fair price and they may start to steal some market share from some of the Europeans. IMO
Mark
Maybe it's a matter of glass half full or half empty. I do agree that the Tribeca will be important. But so was Baja and that flop didn't seem to hurt them much.
Dave: I'm not sure I agree. When a dealer gets a car you might say it's leased, or on hold. Production numbers and sales numbers don't always match.
Mark: thank you for recognizing that. And yes, it was a lot of work. I was up past midnight to get all those photos up on the Industry Preview days of NAIAS, which actually come before the public opening! :-)
Bob was there too and a lot of those photos are his. He was schmoozing the Product Planning folks for more info while I took every photo I could imagine.
Still missed some - like the LATCH anchors, which other members caught later.
-juice
I didn't say the record sales year was a flop. I'm just saying that Subaru has to sell well on the Tribeca because they have well north of 100 million invested on it. Baja tooling costs were a drop in the bucket because most of the tooling was common with OBK and they didn't have to convert half the plant to run them. This is not the case with Tribeca. I work for a Tier 1 to Subaru and I know the investment in tooling on just our portion of the program is astronomical.
I personally like the Tribeca. If it weren't for the nose I would love it. I think it well meet or exceed most of the people's expectations on this forum but Subaru has got to do the marketing on this vehicle to get the sales. Good magazine reviews won't hurt either.
I can say that the few Pilot units I've seen in person, the build quality is phenomenal for a pre-production vehicle. This alone says alot for the effort that Subaru is putting into this thing. SIA team should be proud of how well the Pilots are assembled. This is no small task considering how many things aren't production level for component parts. Good job Tribeca Team!
-juice
Maybe that's why there are differences here:
http://vocuspr.vocus.com/VocusPR30/DotNet/Newsroom/Query.aspx?
Subaru says record year for 2004 with sales at the top chart being 187,402 up 0% yet the by state chart at the bottom saying sales were 170,391 down 3%.
I'd like to know how that translates into record sales.
Does something need to fill the space? Afterall it was Isuzu's assembly side not Subaru's.
-juice
1. RH Manual Seat
2. LH Memory Seat
3. OnStar capability
4. Different interior trim colors with a Red
Leather version
Red leather is different, but I'll take the two-tone black and beige, thanks.
It'll debut in NY, they're saying. So we'll know for sure on 2/23 or 24th, the press days.
Subaru's press day is the 24th, in the AM. Saab's I'm not sure.
-juice
-juice
Pre-production units won't begin until around December this year with a launch target of June 06. I'll post any updates when information is confirmed.
-juicer
OK, so I'll be in NY from the 22-24, next week basically, and might have time to check out this trendy town.
Any suggestions on what to see? How far from the Jacob Javits center?
I'll also be in NY to see Subaru's presentation live on the 24th in the AM. :-)
-juice
I don't know whether FHI will make a presentation again this year, but it couldn't hurt to ask your SOA handler about it.
I'd like to meet Mike Whelan, at least. We'll see if I'm lucky enough to do that.
-juice
If you are able to collar him, I have a suggestion to pass along.
Subaru needs to communicate better to its customers the technology that's behind the performance and safety of Subarus. Distributing backgrounders to the press isn't getting the job done and I have a simple solution. Make the "Mechanism and Function" portion of the service manual freely available from subaru.com. It's a generally technical discussion of how and why things work on a Subaru. Subaru wisely consolidated the separate versions of that manual for each product line into a single manual for the 2005 model year. The online version of that service manual section available on the Subaru Technical Information System (STIS) (see MSA5T0530A) is organized perfectly for this purpose - many dozens of individual pdf files - so that one wouldn't need to download the whole beast just to get the discussion of Subaru's variable valve lift system, for example. Mike needs to push for freely downloadable versions of the Mechanism and Fucntion manual, accessible from subaru.com.
And, for good measure, SOA should also make freely available the annual New Model Update documentation that's supplied to service techs (e.g. 2005 New Model Update).
FHI is extremely secretive, to a point that it's absurd, actually.
-juice
I was taking my wife, sister and her kid to visit my relatives. On the way back, there was a convoy of four identical vehicles. Three were silver, one was a really pretty burgandy. They looked very abnormal, and they were all driving at the exact same speed. As I got closer, I noticed a Subaru badge on the back. Then something clicked. My sis was in the front seat, and I told her to get the camera out-quick. She looked at me very oddly. I just told her to do it and she did. She snapped off two pictures of these four B9 TRIBECA crossovers before the batteries on her digital cam died. The grille, btw looks a lot better in real life.
http://pg.photos.yahoo.com/ph/chrischairs/album?.dir=/c723
They had New Jersey plates.... very odd indeed. But overall a very pretty car IMO. I had a hunch that they would be hanging around Lafayette, but I hadn't really expected a fleet of them....