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

nippononly · November 2007

Not really sure why we would be expecting shift quality no better than cars from 40 years ago, Bob...

...but I certainly do expect it to be a lot better than "back in the day"...

...in the 60s we had first gears without synchros, now that was fun. That ALSO would be totally unacceptable to me in a 2008 model, but that doesn't mean I think every transmission today is fab just because it has synchros on first gear.

Juice: I like your "picture is worth 1000 words" demonstration, it is very telling. So the only reason they give you the standard shifter is so it transmits less vibration from the drivetrain? I can appreciate that but there must be some way of accomplishing that objective without putting in a tall, moderately sloppy shifter.

ateixeira · November 2007

With shifters, I think we have to accept a trade off. Without a layer of rubber to isolate, you're going to feel more driveline vibrations through the shifter.

Enthusiasts will probably like it. The way my Miata's short/stubby shifter makes you feel like your hands are reaching in to the gear box, it's so direct.

Funny thing is they sell aftermarket 8 ball shifters with taller shafts because some people want more leverage (I'm not kidding!).

At least Subaru offers the SPT shifter as an option, even if it is port-installed.

rsholland · November 2007

The WRX does not have a rubbery shifter. If anything it's.a bit notchywhich I like.

Bob

dino001 · November 2007

I have short-throw shifter on my '02. It should be standard on all WRX, period. After initial shock for those who never had to use so much force to shift a gear, it rewards you with fantastic crisp movements.

I remember once I was away and I came back home after 3 weeks driving my sisters little old Opel with miniscule 1.3l engine (probably 60-70 hp), I actually stalled my car two times, then performed couple of "leaps"

. Of course I was back in the game after two minutes - boy did it feel good, or what. Like an old-style racing car :shades:

It really takes driving something else for a few days to realize how great my "now getting older" WRX is. I just worry the experience may never be repeated with new mainstream-schmainstream design

ateixeira · November 2007

Hope you still read this thread...

Can you hop over here:

albook, "Crossover SUV Comparison" #3863, 18 Nov 2007 6:10 pm

They're discussing the Pilot's platform and that photo you have would really come in handy. I don't think these guys fully understand platform sharing.

The Tribeca is discussed in that thread, to bring this back on topic.

nippononly · January 2008

were down 6% from 2006, is that correct? And Subaru's hopeful forecast for '08 is still to sell 200K cars, which would represent more than a 10% increase from '07?

Will we see a diesel- or hybrid-powered Subaru at dealers in the next 2 years, do you think?

ateixeira · January 2008

I doubt they'll meet that target. I'm expecting doom-and-gloom for the whole US auto industry in sales terms this year.

The 09 Forester debuted and looks very strong, but I don't think it'll be enough to offset a lousy market.

Now, in terms of pure market share, I think they'll improve. The new Forester is a lot more mainstream, less tall wagon and more trendy crossover. The same changes that made the WRX too civilized are going to be seen as a good thing to a Forester customer.

Plus, I honestly don't think I have *ever* seen such a near-unanimous positive response to a new Subaru design. Everyone seems to like it.

In terms of market share, I bet they gain about 10%. That's still a small gain in the big picture, about 0.1% gain if you look at the whole car and truck market.

nippononly · January 2008

I think most of the forecasts I have seen for auto sales this year are flat relative to '07. So for Subaru to gain 0.1% in market share, you are saying that in '08 they WILL achieve a 10% gain in sales over '07 then?

I will be curious to see how how high they take the incentives on the Outback to push them out the door, or if they will just stand pat on incentives and let sales decline gradually on that model.

ateixeira · January 2008

Oh, I don't think sales for the overall market will be flat at all. I think they'll be down significantly.

OB sales are OK, the Forester has been hurting them due to its age.

nippononly · January 2008

Well, they are giving back $1500 in cash on Outback, so I would HOPE OB sales were OK! I hope they do not raise the incentives any more. Better just to let sales taper off a little if that is what they are going to do. Outback is in what, year four of its current cycle?

Obviously if the market is down by a few percent this year and Subaru merely maintains sales at '07 levels, it would gain market share. That would be intriguing to me: is there something about Subaru's typical customers that insulates them more from downturns in the economy than the customers of other automakers?

ateixeira · January 2008

Yep, OB came out in 05 and just got the mid-cycle refresh for 08. The new one should arrive for MY2010, and test mules are already circulating.

To answer the question in the 2nd paragraph, yes, to some extent, Subaru customers tend to be more affluent and could afford a more expensive car, but they simply choose not to.

A while back we had a letter writing campaign to try to get official presence on Edmunds.com, but what was eye-opening was all the letterhead members used to send me the letters (I collected them and submitted one single package). Unbelievable. VP of this, CEO of that. I could not believe my collegues were in such high positions, I was so impressed.

So for the most part, people that can afford to spend more would still be able to make a purchase. I'm not sure if they would postpone it or not, I guess we'll see.

I fully expect a recession yet we've saved up in advance, so I'll be Forester shopping as soon as the new one arrives.

paisan · January 2008

Unbelievable. VP of this, CEO of that. I could not believe my collegues were in such high positions, I was so impressed.

I'm a CEO of my own company

and was a VP at Prudential. In the financial world the VP title is almost an entry level position.

I think that a lot of the core subaru customers are professors, teachers, etc. who basically are fairly insulated from economic downturns. This helps maintain their customer base in such economic times.

-mike
Motorsports and Modifications Host

nippononly · January 2008

is that Subaru's sales now are actually LOWER than they were in calendar 2004, the last full calendar year upon which this thread was founded in 2005. And the 201K sales goal in 2005, revised downwards twice to that figure from 250K originally, has never been met since.

But the other crucial piece of their problem back in '05, the huge swaths of red ink at SIA, has been cured by Toyota, which is now cranking out Camrys to the tune of 100K per year in Indiana, IIRC.

Funny statistic: Toyota just about sold one Prius for every Subaru (all models combined) sold in 2007. :-P

ateixeira · January 2008

True, but the 2 latest intros have been successful, i.e. the revised Tribeca and the new Impreza. Each has set sales records since they've been out.

2007 was bad mostly due to sales prior to those intros.

If you compare model year 2008 to model year 2007 they've improved.

nippononly · January 2008

I was glancing at the Detroit show news on MSN, and noticed that Mitsu is now going to sell a Lancer Ralliart that is more than tack-on pieces and alloys, but instead competes directly with WRX? 2L turbo making 235 hp, 6-speed SST-automated manual (no stick and three pedals, blecch!), all the prerequisites to go head to head with WRX. Should WRX worry?!

rsholland · January 2008

Absolutely it should worry. My take is that the new Ralliart will put WRX product planners on fast-forward with a "new and improved" v2.1 WRX.

Bob

paisan · January 2008

Absolutely it should worry. My take is that the new Ralliart will put WRX product planners on fast-forward with a "new and improved" v2.1 WRX.

I agree. I also think that this is part of their plan. In the commodities trading world we have a saying "don't use all your bullets in one shot" or "save a few bullets for later". If Subaru came out with a total kick-butt car off the bat, they'd have nothing to one-up mitsu with later on. I think this is the key reason the STi and WRX both have essentially the same powerplants as the last gnerations.

This gives them the opportunity to come out with a hopped up WRX and STi in a year or 2.

-mike
Motorsports and Modifications Host

waltchan · January 2008

Subaru can gain sales again if they offer at least a small three door hatchback with an optional AWD. Back in the 80s and 90s, there was the Subaru Justy that gets great MPG (around 50 MPG highway) and comes with a 3-cylinder engine with a CVT transimission. It bagan production in 1987 in the US and discontinued in 1994. I inquired about the Justy at the 2008 LA auto show and to see if if anything similar like the Justy will come back in the future, and I was shocked to find out that none of the Subaru reps has heard of Justy. That's pretty sad. Did Subaru forget to make a fuel-efficient car that was once top in the 80s? Today's Subaru get awful fuel economy.

nippononly · January 2008

Word is that a 50-state diesel for many of the Subaru models is only a couple of years out, and it should substantially improve Subaru's fuel economy.

I would like to see them borrow some of the hybrid stuff from Toyota and mate it with the 2.5 as well. A hybrid Impreza with a threshold speed of 35-40 mph would be FAST and still manage mid-30s or better for mpg in town, I would think.

As for the Justy, GOSH I wish they would sell the new Justy here:

http://www.worldcarfans.com/9071123.005/all-new-subaru-justy-announced-for-uk

Note that while this article only makes mention of the 1.0, the Sirion that the new Justy is based on also has an optional 1.3L engine, with which it makes the 0-60 cruise in about 11 seconds. Sell it in the States, Subaru!

jeffmc · January 2008

I'd have to say no thank you to that, nippononly. I don't want to drive a FWD Daihatsu. The Justy is likely a temporary stop-gap to help bolster Subaru's European sales. Subaru will be introducing their own global subcompact, at which point they won't need the Daihatsu-sourced Justy. What I DO want is the Honda Fit-sized G4e Subaru concept, developed and built by Subaru. G4e (or a gasoline version of it) may be that global subcompact.
http://www.edmunds.com/insideline/do/News/articleId=122961

ateixeira · January 2008

235hp will put pressure on the WRX, without a doubt. Subaru did not boost power when the new WRX came out, it still makes the same 224hp as before.

Also, Subaru has limited what options are available, and people are complaining loudly about that - no moonroof, no leather, for instance. I think that was planned and they'll phase those in next model year (Limited models).

But now there's pressure to boost power as well.

To me, Lancer has 2 strikes - sedan only, no 5 door model, and no true manual.

I think it will definitely pose a threat, though. Americans tend to prefer sedans, and while enthusiasts like us want manuals, I bet their SST will appeal to a broader market.

ateixeira · January 2008

I like those, in fact that's about as good as a car that small can possibly look.

Thing is, that will never do a lot of volume. It might help CAFE numbers and boost the "green" image for Subaru, but that's not what will sustan 200k sales/year for them. No way, no how.

Having said that, I'd shop for one, sure, especially if it came with a panoramic moonroof or glass roof of some sort.

nippononly · January 2008

Well the Mitsu SST 6-speed has the performance numbers to sell successfully, I think, even if it IS an automatic. The 4-speed "Sportshift" TC auto in the WRX is most uninspiring by comparison! But then, WRX tends to sell in a very healthy proportion in manual shift.

Perhaps they will split this market - the manual buyers will all buy the Subaru of course, and the automatic buyers will mostly buy the Mitsubishi.

jeffmc: fine, Subaru could bring the G4e then - I really liked the look of that one. But bring SOMETHING Subaru, and bring it soon! I figure the G4e is at least two, maybe three years away from reality?

I see the '09 Forester will sit on the reinforced version of the Impreza chassis that the STi uses, and I wonder how much that will increase its weight, given that it will use the same engines as the new Impreza (minus the STi), right?

ateixeira · January 2008

Yeah, I think 85% of WRX are manuals, something like that. Subaru didn't invest much because frankly noone cared. I think a CVT may arrive before a 5th ratio ever does.

The problem with SST is no matter how good it is, in this segment it's an uphill battle, people want a clutch.

Forester specs are out. It gained less than 100 lbs, not bad considering it got bigger in every dimension. Also, it's some 250 lbs lighter than a RAV4 and a whopping 350 lbs lighter than a CR-V.

It looks very promising. I'm hoping they didn't kill the car-like handling, clearance is high at 8.7-8.9".

nippononly · January 2008

People here at work who are interested in Subaru or in buying a Forester (and yes there are more than a few satisfied Forester owners here) have all applauded the update in exterior styling when I have showed them pics. The consensus seems to be "about time, and BOY does it look better than the old car".

ateixeira · January 2008

The old boxy model was function over form. It was as if they first designed the cargo area, and then the sheetmetal that went around it. It was very practical. I owned one for 9 years.

The new one is more attractive, for sure. I like it, but my wife loves it.

It's still under 180" so it didn't grow TOO much. If it did it would alieante a lot of buyers. A few were even upset that it grew at all.

The WRX 5 door is shorter than before, so now there's no overlap. The Impreza hatch is small, the Forester much bigger. Should reduce cross-shopping.

rsholland · February 2008

http://wardsauto.com/ar/subaru_sets_sights/

ateixeira · February 2008

I'm surprised he didn't talk more about the Forester.

I've been asking around, since I'm shopping for an 09 Forester, and was told there will be no special introductory offers for the Forester, like there was for the 2006 Tribeca. There will also be no special guaranteed trade-in allowance program, like they did for the 2008 Impreza.

Also, I was told there won't be VIP pricing for the Forester at first, that I would probably have to wait at least a month or two.

So they are very confident about the 09 Forester selling well from the get-go.

They were actually worried about the new Impreza, over concerns of design acceptance, but even those proved wrong, as December sales proved.

Still, I think we're in a recession, and will only realize that a year or so from now. January's seasonally adjusted annual sales rate was 15.9 million cars/year, and a good year is 17 million. So I do no expect a good 2008, as I've been predicted for a while now.

tifighter · February 2008

Bummer about no GTP for the Forester; it would go a long way towards me making the jump to the '09. Its loss will make me take a closer look at the competition for sure.

nippononly · February 2008

Uh oh, they are making sales forecasts again! 230K by 2010? Will we have to revisit here in about three years? ;-)

I agree very much with what he says about the Forester in that article - it is every bit as good a value as the CRV, lacking only the cachet of the Honda name. It would be gratifying to see Forester sales pick way up this year, as juice seems to imply SOA thinks they will.

I am surprised that they are surprised that Impreza hatches/wagons are selling better than the sedans - hasn't that always been the case with Impreza (and other models too) at Subaru?

ateixeira · February 2008

I'm not sure.

The original RS, which came out in 1998 IIRC, only came as a coupe.

When the sedan model came out, it outsold the coupe by a wide margin.

Subaru owners are practical people. It doesn't surprise me at all that the 5 door outsells the 4 door, just like the 4 door used to outsell the 2 door.

230k by 2010? That's optimistic, but I'm sure they're hoping for a big success from the next Legacy and Outback, which will grow bigger and probably offer both diesel and 3.6l H6 engines.

It's possible. Likely? Tough call. Let them hit 200k again first.

nippononly · February 2008

"Let them hit 200k again first."

I will second that. 2010 is also the year Toyota will have a brand new RAV4 - fierce competition for the Forester if Toyota does any kind of decent job on the update. And there are no new models in the pipeline for the Subaru brand in NA before 2010. So Impreza will gradually trend down in sales, as will Forester, and Legacy/Outback will have to pick up all that slack AND sell another 30K units at least to make the 230K sales goal. I'm not saying it is impossible, but based on the last 25 years, I would say it is unlikely.

rsholland · February 2008

Next spring, or summer, the larger all-new 2010 Legacy and Outback will be here.

Bob

ateixeira · February 2008

Yeah, and who knows what Toyota will do to the RAV4. I thought it would grow, but the Highlander is still not that much bigger, so probably not. I had expected the Highlander to grow to CX9/Acadia size.

The new Forester may hurt Tribeca sales, especially the 5 seater. It's almost as big for $5 grand less. Maybe $2 grand if we're talking turbo.

The next Tribeca needs to grow bigger - to further distinguish itself from both the Outback and Forester.

nippononly · February 2008

the new Tribeca due? The competition is sooooo fierce in the segments where Forester and Tribeca are doing battle!

Toyota launches the Venza this year, basically a Camry wagon/hatch. Honda ALMOST brought over the last Euro-Accord wagon...maybe if Toyota does well selling the Venza, Honda will also introduce an Accord wagon in a couple of years. The new Legacy could face some stiff competition, although it remains to be seen if any competing wagons will offer AWD.

paisan · February 2008

Don't forget we have not seen the refinements of the Impreza driveline and tweeks in the offerings. In the Imprezas we'll see more power, moonroof, and better driveline options offered in the next few years. They filter that stuff in over the first few years.

I fully expect to see a more powerful engine and upgrades to the AT and MT gearboxes and moonroof/leather options available.

-mike
Motorsports and Modifications Host

nippononly · February 2008

On the flip side, Toyota has just reintroduced the AWD Matrix. You get the 2.4L engine, more room than the Impreza, and that moonroof you just mentioned as an option. The limiting factor is it is offered in 4-speed automatic only, which will be a handicap in a couple of years when the Impreza has more gears.

But this year (and probably next before Subaru updates the Impreza), the two will square off, and AWD Matrix sold pretty well last time it was here.

paisan · February 2008

No MT option in AWD Trim would leave it off my list.

Also what kind of AWD system does it have? My guess would be a FWD with Rear Drive re-active.

-mike
Motorsports and Modifications Host

jeffmc · February 2008

"the new Tribeca due?"

Believe it's not til 2010 as a MY 2011... though they seem to be making a push for quicker updates. Was supposed to be at least one model a year... '08 Impreza in 2007; '09 Forester in 2008; '10 Legacy/OB in 2009; '11 Tribeca in 2010.

"Toyota launches the Venza this year, basically a Camry wagon/hatch. Honda ALMOST brought over the last Euro-Accord wagon...maybe if Toyota does well selling the Venza, Honda will also introduce an Accord wagon in a couple of years. The new Legacy could face some stiff competition, although it remains to be seen if any competing wagons will offer AWD."

In order for there to be competition in the US, SOA would first have to decide to re-enter Legacy into the wagon market. Shocking to think about, really... that Subaru's essentially out of the sportwagon niche in the US. It'll be really interesting to see what happens to the next Outback as Subaru continues to differentiate between models. Will they continue to push it more toward an SUV, or will it become more of a Legacy wagon replacement so as not to compete w/Forester & Tribeca? If it continues growing SUV-ish, or becomes the 7-pass Exiga, Subaru would be out of the true wagon market altogether, a niche they single-handedly kept alive in the US for a while.

nippononly · February 2008

is, in fact, front drive with Rear Drive reactive, you get a gold star! ;-)
Not that more than a handful of the buying public will know the difference. That has always been Subaru's challenge, to explain why their AWD is better. It never has in a way that was widely comprehended and responded to, seems to me.

And I am with you paisan, no automatics for me, and the Matrix AWD would never be on my list. But considering that lots of people prefer automatic, that may not impact sales too much, and may in fact leave Impreza with a proper challenge on its hands...

"Subaru would be out of the true wagon market altogether, a niche they single-handedly kept alive in the US for a while"
Well, them and Volvo. ;-)
I can't understand how the Legacy GT wagon didn't sell. That car was a great value. The Outback is a pale substitute. It's good for what it is intended to do, but it's just not the same.
As a proper competititor to models like the XC70, though, it is compelling. I hope they don't turn it into some sort of low-slung crossover/SUV/God-knows-what for the next gen.

zman3 · February 2008

Not that more than a handful of the buying public will know the difference. That has always been Subaru's challenge, to explain why their AWD is better. It never has in a way that was widely comprehended and responded to, seems to me.

I also think that is a hard sell for Subaru. I am on my second Subaru. We also have an AWD Enclave. At the end of the day they both move very well through the snow and rain. I really couldn't care less that the Enclave has something like a default 10/90 torque split between front and rear. It still sends power where its needed, when its needed. I think that is all most people will care about. An enthusiastic minority may care that the Subaru system is more "sophisticated", but the majority most likely will not.

dino001 · February 2008

"Subaru would be out of the true wagon market altogether, a niche they single-handedly kept alive in the US for a while"
Well, them and Volvo.
can't understand how the Legacy GT wagon didn't sell

There have always been other European wagons around (Saab, BMW, MB, Audi), albeit in smaller numbers. GT didn't sell because they never marketed it. Other than Mike, Juice, me and couple of other people, nobody knew about it. Wouldn't be surprised if the CEO of SOA didn't know they had offered them. I haven't seen single commercial featuring Legacy wagon when it was around

I talked to couple of dealers here and they always said "they don't sell". Duh - if nobody knows they exist, even fewer would buy. Here they even struggle to sell GT sedans - same reason. I put 95% blame on clueless marketing: first going after wrong brand (BMW instead of Volvo, Saab and Audi), then simply abandoning it completely for the new kid (dust in the wind). Finally - silly commercials stating Leg GT being faster than boxter. Those were at least having some message - but it was too little, too late.

paisan · February 2008

Wouldn't be surprised if the CEO of SOA didn't know they had offered them.

Actually the CEO's wife has a LGT, not sure if it was a wagon or not, but he definitely knows them.

-mike
Motorsports and Modifications Host

dino001 · February 2008

So why was he set to prevent others from enjoying it, too? :P

paisan · February 2008

I firmly believe it's due to the newly released impreza 5 door being the same size, build quality, etc. They didn't want to cannabalize the newly released car.

We shall see, my guess is that it re-appears in the MY10 when we get a significantly larger Legacy.

-mike
Motorsports and Modifications Host

dino001 · February 2008

Well, at least in case of one person, they lost a sale. I have no inclination of buying Impreza in its current form and I would run to the dealer today if old 05 manual GT Legacy wagon was around. One may not be much, but I dare to say the strategy is dumb. Less is always less at the end, even if it is more for a few months.

paisan · February 2008

What is your reasoning for wanting a Legacy Wagon as opposed to an Impreza 5-door?

You have to understand, Subaru is a small company, they aren't GM or Ford or Toyota, therefore they can't make 9 million combinations and permutations of a vehicle. They don't build to order, they build what they expect to sell. Anyone who owns their own business knows that you can't be all things to all people all the time.

-mike
Motorsports and Modifications Host

nippononly · February 2008

people keep saying the last Legacy GT wagon was the same size as the new Impreza? Do the specs bear this out? Because I can assure you the Impreza FEELS like it has way less interior space, elbow room, etc.

And I don't buy the "you can't be all things to all people" argument, because the '05 LGT was something they ALREADY HAD, they just stopped building them.

paisan · February 2008

The cabin space is BIGGER in the new Impreza than the Legacy.

I own the Legacy, and have driven a bunch of the new Imprezas.

As for them already having it, that doesn't mean that it is cost effect to continue to make it. Do you understand what I'm saying about them pre-building the cars? They don't sit around at the factory and wait for orders. They crank out X of this trim and colore, Y of this trim and color, etc. They then hope that that's what the customers will want. They didn't want to gamble on the Legacy wagon, which didn't sell in large numbers. There is a small minority who bought the Legacy wagon, unfortunately.

The only place that the Legacy is bigger than the Impreza is in the cargo floor in the rear.

-mike
Motorsports and Modifications Host

dino001 · February 2008

1. Cargo space in the back of Legacy GT are probably tripple of that in Impreza. Not even close.
2. Dashboard and interior design of older Legacy are far superior to that in newer Impreza. The latter is is drab, grey and feels like designed ten years ago by bunch of cheapskates, which is OK for 17K 2.5i, but totally inadequate for sub-30K "premium" WRX. The fact it's better than previous is only a testimony to the previous. Not even close.
3. Exterior design of Legacy is substantive as opposed to Sebring front and boy-racer rear on Impreza. Not even close.
4. Legacy had leather and sunroof available. Nada in new Impreza. Calling package premium just because it has better stereo and butt warmers is ludicrous. Don't tell me it's coming. I want it now, not maybe in ten years.

Reasons enough for you?

I'm sick and tired of "we are small company" excuses. Why should I sacrifice my desires/needs/preferences so bunch of execs and shareholders could feel warm and fuzzy. I'm the customer - no product, no business. Which would be allright, but what infuriates me though is that a product I would be willing to entertain buying is available in other markets. So they clearly must be thinking other people are worth the effort - just not me. That is not unique to Subaru, of course, e.g. Honda has its Euro Accord (our TSX) available as wagon. But in Subaru's case it hurts more.

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

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