I've roamed through the press releases some, and it seems like Subarus sales are rising. But since there is so much red ink in the North American operation right now, it seems like FHI foresaw there would be a need for greater income down the line, which is why it originally formulated this "five year plan". That plan includes sales of 250,000 this fiscal year, which seems like an impossible target at this point. Right now, annual sales extrapolated from April sales, would only come to 201.5K. There will be about nine months of Tribeca sales too by the time 3-31-06 rolls around, so maybe they can bring that up some more. But 250K sounds pretty high from here. I wonder if SIA would show a profit if they COULD do that 250K sales target.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I agree. I think their sales projections were a bit too aggressive, and unrealistic. I think FHI has realized that, and has scaled those projections back a bit.
Look, I'm no expert in this area. All I know is what I read. The cars seem to be selling well, yet there's red ink. I don't know anything about the their aero industry, other than that where FHI began their business. That one news release mentioned something about problems in that area. Couple that with a huge investment in new product, and somewhat unstable currency and other worldwide issues, and the sum total equals red ink.
I'm not worried. FHI knows the next few years will be rough. They seem to be laying down the foundation for the next 20 years or so, and sometimes that means you will encounter some rough water.
I'm more concerned with GM's situation, and how that could impact FHI. After all GM owns 20% of FHI, and a lot of FHI's engineering and purchasing is now under GM influence. GM could be forced into making some hard decisions, and that may impact FHI. We just don't know...
that's what worries me the most, not FHI's fortunes. It is GM's investment, and its itchy trigger finger. Not to mention GM needs more product from Subaru for Saab, and may want to invest more heavily to gain more control, especially if it sees FHI on the ropes financially. And I think we can agree that GM control of Subaru would be a death knell for "the little AWD brand that could"....
SoA has to find a way to turn this into a profitable year!
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
"Not to mention GM needs more product from Subaru for Saab"
Do they? I dont think the 9-2x is supposed to be a long term vehicle. GM supposedly evaluated the Tribeca as the foundation for a 9-5x, and rejected it. It appears that the 9-5x will be a Saab version of the Equinox\Torrent\Vue. GM's plan seems to be to permanently ruin Saab with rebadged Chevys, not Subarus.
I think Subaru has a great product for the northern states who face adverse road conditions much of the year. Outside of this area Subaru does not really have a perfect product yet as fuel economy is hurt by all wheel drive. Presently this puts the company in a niche. Subaru is also small compared to Honda, T, and N, though I don't know the specific numbers. This makes the production of new platforms or even complete facelifts every few years a gamble in the marketplace. This I believe is why we are hearing the new legacy and outback are 'evolutionary.' In fact they ARE revolutionary, but that goes off topic.
So the heated question is, is FHI in trouble. Or is Subaru America, in trouble, or not. My perception is that Subaru is a strong suit for FHI, and it will eventually profit its owners, though one can never be positive. Just looking at the charismatic designs and ownership experience, it would be hard to imagine someone not creating a success story with this division of FHI. FHI as a whole I am not edumacated about, but selling to GM is not a bright spot in their recent history, nor is the rebadged SAAB. So, I have no comment on the parent company.
though if this does wind up being a second year of losses at SIA, Subaru should work darn hard to ensure there isn't a third.
BTW, I would agree that the new Legacy is as much evolutionary as revolutionary - the base engine hasn't been changed at all, has it? Nor has the flat-6, to my knowledge. The revolution came in subbing in some additional aluminum to reduce weight and adding the turbo to the line, and even this was just an existing engine (detuned for use previously in the Forester) in a new application. The looks are VERY evolutionary to this jaded eye, especially those of the Outback - they made it a little more squinty-looking and added some straking to the hood and a little more pertness to the butt.
IMO, that was smart on their part - they could not afford a BMW-like alienation of existing customers at this juncture.
And as far as I can tell, FHI is in financial trouble a lot of the time - that is why it was forced into the position of selling GM 20% of Subaru, for instance. But SoA has been profitable for most years since the "dark days" around 1990. The only way FHI's troubles could impact Subaru in America is if it were forced to sell more of Subaru to GM (nooooo, noooooo, as Mr. Bill used to say!) :-(
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Yes, it's available in Europe and other markets—and with a 6-speed manual—in both wagon and sedan. It's known as the Legacy 3.0R Spec B. It has a tweaked suspension with Bilstein shocks, hence the "Spec B" name.
For '06 I just learned we will be getting a 2.5 Spec B, with turbo, but minus the 6-speed. At first glance that may seem like a mistake, but if you've ever driven a new Legacy turbo, a 6-speed is really not needed. I'm sure the H-6 would benefit from the 6-speed, as the powerband is narrower that of the 2.5 turbo.
You are right on the money. Subaru cannot turn it around. Why? look at the new Tribeca. Is this design a van,crossover, or suv? What is it? Its looks have much to be desired. The price is way too high, especially when in this price range you have lots of choices. I am sorry to say that this vehicle may very well be a bomb for FHI Second, the Forester needs a complete overhall. Don't get me wrong it a great little vehicle, but small for a six footer like my self, I have owned two. In addition the Forester seats are not very comfortable, especially on long trips. How hard is it to design more comfortable seating? Plus not everyone wants a turbo engine? Turbos engines have a shorter life cycle. Finally, have you noticed that the subaru dealerships are slowly dissapperaing. WE have to travel greater distances to find a subaru dealer. I am sorry to be so negative, they have a great vehicle line but their styling and marking is way off base.
If you all will indulge me, let me bring up the Isuzu situation again. In the early 1990s, Isuzu decided to specialize on trucks and SUVs. That used to be a niche market, then the truck market got hot. Should have been good news for Isuzu. Somehow it was not. Instead of continuing to expand sales, they ended up getting pushed out of a growing truck market, as their vehicles were no longer state of the art. Keep in mind, Isuzu died (for all practical purposes) before the recent SUV sales slump, during a time when SUVs were selling like crazy.
Now we have Subaru. They have a history as builder of niche vehicles with AWD. The market shifts from SUVs from crossovers, and everyone starts building them. Seems like that should benefit Subaru. However, instead of significantly increasing their sales, they end up with a declining share of a growing pie (see paragraph above).
In order to survive, they decide to go upscale, leaving behind parts of what was probably the most loyal owner base in the industry. As they go upscale, they encounter new competition from a slew of entry level lux vehicles with AWD. In the mean time, the Koreans have really gotten their act together improving quality and product. Features such as AWD, side curtain airbags, stability control are all available on inexpensive vehicles like the Tucson and Sportage. Subaru is getting squeezed from the bottom and from above.
Like I have said before, in the Fall of 2003, I thought that our Forester was state of the art. However, the car industry changes rapidly. Today, a 4sp auto or 5 sp manual, no stability control, and no curtain airbags is not state of the art.
I do not know what the answer is, because I still think Subaru makes a fine car. However, I think a changing corporate focus and lackluster (IMHOP) marketing is not helping them.
The number of dealers has been increasing slowly, of course there are a few exceptions - dealers may close because a larger-volume manufacturer offered perks for exclusive outlets/showrooms.
Tribeca had 600 pre-orders and appears to be having a good launch, better than the Legacy last year, which by the way sold in record numbers.
I think there is quite a bit of hysteria in this thread. Let's look at the facts:
* forecasts are always extremely optimistic * 2004 was a record year for Subaru * 2004 was the best year ever for the Legacy * April 2005 was the best month ever
So the momentum is there and only growing.
Yes, incentives are up, but the outgoing 2004 models had even bigger incentives, plus if you look at sales prices they are about $2000 higher on average for each of those Legacy/Outback models.
So if there are misfortunes it's something noone here has looked at yet - the cost side of things. Like creating a completely new Tribeca.
Matrix is roughly the size of the Outback Sport, and the AWD model only offers 123hp, vs. 165hp for the Subaru. For MY2006 that should go up to 173-175hp for the Subie.
And Subaru needs help?
Matrix makes sense as a light FWD hatch, but not the current AWD iteration.
Subaru should be flattered that people are comparing the Legacy GT with the BMW 3 series, it's what everyone else aims for.
Subaru has a Spec B model on the way with 18" rims and Bilstein shocks, this is exactly what they need to keep the BMW comparisons flying.
Baja - there you go. The only major failure they've had since 1995, really. Even then they invested so little I wonder how much it really cost them, besides a bruise to the ego.
From Varmint's post # 44: "But people aren't buying them."
That's a quote out of context. Nippon's assumptions were correct. Follow the full course of my posts and it should be easy to see that I do not believe Subaru has sold zero vehicles. The point is that Subaru does not appear to be finding many new buyers. (And by that I mean a higher volume of buyers.)
Sales of the Outback/Legacy are up 11% over last year. As mentioned above, this is largely do to Subaru having a strong April. Is the Legacy/Outback doing well because it's a good product, or is the sales boost a result of a stronger market?
Looking at the sales of similar vehicles, I'd say it's because the cross-over market is up. Murano (unadjusted) sales are up 37%. Highlander sales are up 13%. Pilot sales are up 18%. Here we have the new Outback doing moderately better than the old model at a time when cross-over sales are up almost universally across the board. It's a new vehicle! It should be clobbering last year's numbers. (By "clobbering", I mean selling faster than the norm for the class of vehicles.)
BTW, I did find one mistake in my earlier post. Forester YTD sales are up 785 units (4%), not 400 as I listed above. For a refreshed vehicle, that's not bad. It's just a low number volume-wise.
In a market where the focus is shifting from body-on-frame SUVs to cross-overs, selling these vehicles is like shooting fish in a barrel. Instead of extending their lead, Subaru is treading water. And apparently not doing it well enough to be profitable.
Also, no one is suggesting that the sky is falling. I'm sorry, but if there is any hysteria here, it's Subaru fans over-reacting to the mere thought of bad results from Subaru's latest moves. The news is not that bad. Sales are not bad, they are stagnant. At the least, they are not enough to cover their expenses.
I find the news interesting because, unlike GM, Subaru appeared to be pretty solid. When you examine GM, you can easily point to the UAW contracts, mismanaged brands, failed vehicles, etc. You could do the same with Mitsubishi. It's been fairly obvious that these companies are failing and the reasons why are no mystery. That's even true with Honda. They've had a stagnation of their market share in passenger cars. But the reasons why are fairly obvious. These are "no duh" discussions.
It's not so easy with Subaru. They don't have such obvious flaws. Had Nippon not prompted me to dig into the issue, I'd have thought that SOA was doing better than anyone could have hoped. The resurgence of AWD has not played into their hands. The WRX and other turbo-powered cars have brought the Subaru name to the foreground. But that name recognition has not translated into increased sales. Pardon the pun, but there's been little boost from those turbos.
I don't have a clear answer for this stagnation and lack of profits. That's what makes this thread interesting to me. There may be something new to learn from this.
Just for the record, I must earnestly disagree here, having OWNED both. But I meant it when I said I did not want it to become the Outback v Matrix thread. I was merely offering one reflection on the cost of Subaru vehicles currently when compared to the rapidly proliferating AWD choices out there that varmint mentioned.
In a 30-mile radius around my house, we have lost two of the five Subaru dealers in the last year, and this is Northern California, for goodness' sake. My area used to be a Subaru stronghold, but there are less of them around these days.
"So if there are misfortunes it's something noone here has looked at yet - the cost side of things. Like creating a completely new Tribeca."
OK, then, so "costs" is your answer to the question of Subaru's red ink the last two years? Well, costs don't occur in a vacuum do they? Even Subaru officials in North America admit it is likely they will not make sales targets this year even with the introduction of the Tribeca, based on a sales volume of what, 48K per year for that model? Which will mean there is red ink on next April's fiscal report too. "Costs" will have exceeded sales profits from the new Tribeca and the rest of the line.
I really think they should have done something like a Tribeca about four or five years ago, not long after they did the Forester, when it was clear that crossovers were going to have a good future, and Subaru was riding high on a wave of fat profits. Instead, they did the Baja??????
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
As are all of Subaru's numbers, really. Forester is up 4% in the last year before the face-lift. How awful. :P
They're not going to grow into a volume seller overnight. Gradual growth has been going on since 1995, with one single year being the exception. 2005 is on pace to be the 10th year (of the last 11) with sales growth.
Is that stagnant? IMO, no. Sales have increased steadily and are now up more than 100% over the past decade.
If that is bad news, I can't wait to hear the GOOD news! LOL
As the corporation grows, they have to learn to control costs, sure. Sales are up, that's not the problem. It's a lack of profit, probably due to variable costs associated with launching a new crossover.
Tribeca is forecast to sell 17k units this year and 35-40k per year after (depending on which source you believe). That's actually obtainable, unlike the very optimistic targets for the Legacy and Outback.
Think about it - they sold a record number, yet they didn't meet forecasts! :confuse:
Tribeca will do far better than the Baja, which ain't saying much, but I'll go as far as saying it's one vehicle that will exceed forecasts.
Should they have done it sooner? If they had, we'd have gotten the Saab 9-7x as yet another TrailBlazer clone. It takes more time and costs more money to develop a new vehicle from scratch (minus the engine).
Keep something in mind - Subaru did not have a large car platform at all. Now they do, so except a full-size sedan soon, or at least a big mid-size. Legacy is a smallish mid-size, about the size of the TSX. Subaru could do something TL sized now.
A lot of those are one-time variable costs. They had zero experience there.
will they ever do an entry-level car again, do you think? Or is Subaru to become the VW of the Japanese world?
Not sure I understand you here:
"Should they have done it sooner? If they had, we'd have gotten the Saab 9-7x as yet another TrailBlazer clone"
I thought we ARE getting a 9-7x Trailblazer clone? In fact, it is just becoming available at Saab dealers, isn't it? What has this to do with Subaru?
When I say they should have done Tribeca five years ago, I mean a less ambitious version - they should have done to the Legacy exactly what they did to the Impreza to produce the Forester. It would have been very cheap for them to do initially, and then we would be here five years later, talking about how it is the perfect time for Subaru to engineer an extended wheelbase version to accomodate 7 passengers.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Problem is, below the Impreza, Subaru has relied on Suzuki to sell clones in Europe (Justy = Swift). In Japan they only make micro/mini cars (R1, R2) that aren't really suitable for US roads, unless they got special tax breaks.
I meant a Subaru version of that GM truck, by the way. Sorry I wasn't more clear. Subaru fought to stay indy and won the chance to develop their own platform with zero input from GM. Thank God.
We might see a coupe or hatch version of the next Impreza, which is sedan/wagon only right now.
They're supposed to add a full-size sedan and a people mover.
The people mover would be (I'm guessing) like the Mazda5, a small vanlet based on the Impreza. If they did that, Forester could get taller and become more brute and less cute.
The full-size sedan, all things being relative, would actually probably be a big mid-sizer, and probably a near-luxurious one at that. We're not talking Phaeton here, more likely prices overlapping with the Tribeca, $32-38k.
A "Grand Forester" was my idea all along. I had been asking for that since the Forester came out.
Tribeca is different, more luxurious and expensive.
Now they'll more likely just let the Forester grow slightly.
no, relatively flat sales since 2002, when FHI went on a major sales-increasing drive, is stagnant. Overall, barely breaking 200K sales in a market this big is such a tiny number, you would think a company with such a widely known name as Subaru would be able to increase sales more rapidly. Well maybe you wouldn't (!!). But I would. Back in the 90s Honda, a company with only three or four models at the time, was making WAY more sales than this. I get that their cars at the time were much more mainstream - the thing is that Subaru's "niche" (AWD) is becoming much more mainstream these days too. Subaru can't afford to be lost in the rush to market of 25 car companies with AWD everything. And it seems like that is where it is headed. For me, evidence of that is easy to find in a sales goal of only 35-40K for Tribeca. This is a midsize crossover in a market where that is one of the hottest up and coming segments. It is also AWD in a market where AWD is hot, hot, hot. Yet Highlander turns more AWD sales than Subie's Tribeca goal each year, and it is far from brand new, and Toyota does not have the rep for AWD that Subie does.
The Mazda5 will be a good canary in the coal mine as to whether Euro-style MPVs will sell in America. But this would not be a direction I would encourage Subaru to go in at this point. Let someone else be the guinea pig - I don't think this will be a hot segment.
I don't know about anyone else, but it is plain to me that Subaru needs a bigger car than Legacy, and now that Tribeca is arriving, they should do it quickly, to amortize Tribeca development costs sooner. They should have a wagon version of that one too - Grand Outback!
Compact coupes are another iffy segment, and no-one bought the RS 2-door Subaru used to sell here. Mainly, it would have been nice to see them hurry the Impreza makeover - it is such a slow seller, it needs more frequent revisions.
I agree it is important for them to get Tribeca, but not if it breaks the bank. Especially for projected sales of only 40K.
It is too bad that rally racing hasn't become more prominent in the United States - that would really have given Sube a boost. It could have marketed itself as the company with a little rally in every car.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
I just drove a base level 5-passenger Tribeca a couple of hours ago. If I were in the market for a crossover for ~ $31K, this would be my choice. It handles much more like a sport sedan than a tall crossover. I found the rear seat (this was a 2-row seat model) to be quite roomy.
Yes, it needs a larger engine, but the sportshift makes up for that, to a large degree. I'm convinced this vehicle will sell well, especially now that I've driven one. To be honest, I think there's a good chance the entry-level Tribeca could steal sales from H-6 Outbacks.
Also, juice and I were just invited (a few hours ago) to an all-day SOA-sponsored Ride-and-Drive next Tuesday. I'm sure we will have much more to say about it afterwards.
Nip, Subaru doesn't have the production capability to match Honda, let alone Toyota. So, as hot, hot, hot, as the crossover market is; there is no way Subaru will ever come close to those brands in sales.
Sorry, I just don't buy the argument that Subaru is failing or "stagnant" in the marketplace.
As to rally racing, and it's influence: that's precisely why the WRX is doing as well as it—because of rally racing!
The past decade is not the question. Once again, that's comparing the absolute worst period for Subaru with today. I don't think that's the proper method for gauging recent success.
Lately, Subaru has forecasted significant growth. But they've failed to meet those forecasts. SOA's growth rate is no better than the market's growth rate. Seriously, how long has Subaru been at 1.1 or 1.2 percent marketshare? I've easily found links going back to 2001 showing a 1.1% share.
That's like putting your money under a pillow and expecting to rich on inflation.
Stagnation is when you don't budge relative to the market. Success is when you earn ground against that benchmark.
"...there is no way Subaru will ever come close to those brands in sales."
No one is expecting them to match sales volume. With all the hype in recent years, we were expecting some growth. I don't think that is an unreasonable expectation. It hasn't happened.
discussions in Edmunds, this one has become confused as to geographic scope. The stuff I originally linked was mainly referring to Subaru operations in the United States, where it seems most of the problem lies. I have mentioned FHI tangentially a couple of times, because they own Subaru, but Subaru's operations in North America are fairly insular at this point. Their volume line (Legacy/Outback) is built here.
I read today at Automotive News that Subaru will contract to build 15,000 Saab 9-6s (rebadged Tribecas) annually at SIA beginning next year. That must be good for its bottom line. In a weird twist of fate, GM's lack of product may create a path out of the red for SoA!.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
You gotta remember, that while the USA is Subaru's largest market, it still answers to FHI. FHI, not SOA is responsible for the cars we see here. Yes, SOA has a powerful voice here, but they don't dictate what SOA gets in terms of product. This is a discussion that I have had with several folks from SOA, and this is what they have told me.
With that in mind, SOA has to make do with what they are given to sell. Sometimes they get what they want, other times they don't. One thing that I've gotten from several people at SOA is that FHI is very conservative, and often very slow to react. This has caused some frustration at SOA, but it's just something they've learned to live with.
Okay, having said that, here's how I see the US models:
Baja: A failure by all normal business standards. Was it a bad idea? I don't think so. Was it the wrong product? Absolutely. Could Subaru have done better. I think so. Why/how did it turn out this way? I have no idea. I don't know who called the shots here. My gut feeling is they tried to do this model on a shoestring budget—and it shows...
Impreza: Unfortunately the current generation Impreza debuted with an ugly front end. That wasn't SOA's fault. That was Japan's call, and they blew it. Fortunately the WRX saved Subies tail here in the USA—because it's a great car, in spite of its looks. The car went through a mid-life facelift here for MY 2004. They're getting another one for MY 2006, and will last for two years. Normally Subaru uses a 5-year product cycle, but the Impreza will have a 6-year cycle this time around—with two costly mid-life facelifts. The all-new next Impreza will debut here as a 2008 model, and reportedly will be very Euro-looking. There have been recent rumors of it going to a hatchback body.
Forester: This has been a good product for Subaru. It's always sold well, and is also getting a facelift for MY '06, with an all-new model also due for MY '08.
Legacy: The new Legacy turbo has been a huge success for SOA. Sales for the Legacy lineup are way up over the previous model.
Outback: From everything I've read, again a success.
Tribeca: Most people once they see it in person, like it. I just drove one today, and it's pretty impressive.
All future Subarus will wear a version of the new Subaru face found on the Tribeca; love it or leave it, but that's face of Subaru's future. I like it. I know Varmint hates it. Only time will tell who's right here, but I'm willing to bet that FHI made the right decision here.
As I understood it, this was a discussion of Subaru's operations in the US. Or, at the very least, North America. The US is the biggest market and the dominant source of income for most major auto manufacturers. It's pretty clear they have not gained any ground in recent years.
Having said that, I would agree that what happens in other markets will impact what happens here in the US.
So, what's Subaru's global market share? This is their projection.
yes, this is mainly a discussion of Subaru's American operations.
It is a mistake for Subaru to let the existing Impreza run for two more years with nothing more than an 8 hp bump and yet another new face. Not a big mistake, because Impreza is not a big seller, but a mistake nonetheless.
Will it hurt Tribeca sales that there will be a Saab version available? I think so. Not only is Subaru marketing it as a "luxury model" (with questionable rights to such a description) but we all know that you can now buy the Saabaru WRX cheaper than the original article. With GM's practiced use of enormous cash incentives, can we say with any certainty that the Saabaru Tribeca will not be cheaper than the Sube a year from now? I think we cannot. Since this is a vehicle that will cost $28-35K to get into in the first place - already dangerous territory for Subaru - I don't think it can afford the competition.
I really wish Subaru would remember its roots enough to turn out some more basic cars IN ADDITION TO the upmarket vehicles it seems to be concentrating on right now. They could bolster sales in North America a lot if they did so.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
First, Everyone that I know that owns a Subaru *loves* the car. (Including myself with my new Forester). Everyone I have driven in the car is impressed with it. In fact I think my inlaws are going to buy one.
Second, Subaru has excellent performance in it Turbo cars.
So what are my percevied problems? Getting people to look at the Subie before buying there Camcordy. Or there CR-AV4. And, when Warren Brown of the Washington Post looked at the Kia Sportage he raved about it, including the V6 -- which has a few more horsepower than the naturally aperated 4 and gets worse gass mileage than the 2.5Turbo.
Subaru makes a good car; they seem to be reliable and durable. Sure, they are more expensive than the Hondas or Camry equivelants, but they offer AWD. And all of the safety features standard.
YES! Subaru needs to invest some cash here. This could have a huge impact on how it is recieved over the next decade. And Subaru needs a good strategy.
I will agree that Subaru could use a low end item. The Nissan Sentra is going for 1099 around here. A decent little car. Subi starts around twice that, putting it out of shot of many people's first new car buy.
I really like the R2 car sold I believe in Japan. I think these scooter based mini cars will be the wave of the future around urban areas due to light weight and low cost and emissions. I would like to see a Subaru produce a hatch about the size and weight of the current golf, or a little smaller.
I think SOA's weak muscle in Fuji combined with the companies small size makes it impossible to reconfigure the plants for new models or a larger line-up. The company has to make a few good selling lines and stick to a formula. This creates slow growth, but makes fluctuation minimal.
If this thread is about US Subaru (SOA), the title of it, "Subaru's fortunes - can they turn it around," doesn't in any way suggest that. To me it suggests Subaru globally, and not just the United States, but I guess that's besides the point. I do think the thread title is at worst, alarmist; and at best, misleading. It suggests that Subaru is about to become the next Isuzu or Mitsubishi, which is clearly not the case.
They're widely known because of a very effective branding campaign with Croc Dundee. But there's limited growth for a company that only sells AWD, you're not exactly going to own the Florida market no matter how good your cars are.
They'll never be Toyota, or even Nissan for that matter.
The car maker with the most success in terms of sales growth is Hyundai recently, but Subaru isn't willing to try and compete at those prices. They don't have cheap Korean labor behind them.
They do need better marketing, to be honest since Dundee they have not had a single effective marketing campaign. Instead they've had controvery, from the Radar Love WRX ads to the Forester bunny commercial that got PETA all over them. And even I'll admit "Think. Feel. Drive." is kinda dumb.
By the way, I agree about the Mazda5 having a limited audience, a conventional minivan (well, with AWD) would have more sales potential.
Yeah, I agree - the title of the thread makes it seem that Subaru is another Mitsubishi or Isuzu that has one foot in the grave and is bleeding red ink.
From what I understand, they just didn't meet an internal estimate for a sales increase . It's not like their sales have dropped off a cliff and they are ready to declare bankruptcy.
Although, I still say, I think the new corporate face is a big mistake...just IMO, I think it's ugly as sin.
Isuzu, Isuzu. I had an epiphany last night about this. Let's talk about that for a minute here.
SIA used to mean Subaru-Isuzu Automotive. Isuzu bailed out, and for a while there Subaru was building Isuzu vehicles under license. It was no longer a joint venture, but wholly owned by FHI.
Now they've stopped production of Isuzu vehicles, and Subaru's optimistic forecasts were supposed to fill that void.
There's your problem, right there. The added costs of operating an entire plant without Isuzu to spread the costs with. Rather than dividing the costs, Subaru is now footing the bill all alone.
I believe the Tribeca assembly line actually takes the place of the old Rodeo line. So only now will they start to make earnings to replace the lost income from the stoppage of the Isuzu line.
We're getting mixed messages about this. This week's Autoweek insists that Saab will still get their version of the Tribeca, but GM has reported that they will *not* use the Tribeca platform because the powertrain layout will not adapt easily to existing diesel engines for sales in Europe.
Yes I agree that Subaru does not have one foot in the grave at this time. And please know that my alarmist rantings are not because I am anti-Subaru. I'm just concerned. Rapidly changing technology and global overcapacity have created a market where it is very difficult to compete.
People still talk about the big three, overlooking the fact that Chrysler is a subsidiary of a foreign multinational. Ford and GM are sucking wind and will likely end up restructuring and dumping some pension obligations, if not actually going into bankruptcy. Toyota and Honda are extremely tough competitors, and the Chinese are coming. As a small player, Subaru is at risk. I hope they survive, but right now I do not agree with the upmarket strategy, and I think their marketing has been unfocused.
I never heard of Isuzu getting a version of the Tribeca? I read that Saab was going to get a version, but they decided it wouldn't be readily adaptable to the diesel engines needed for Europe, so Saab will get a version of the Epsilon platform instead.
You'll probably need to collaborate to do things like hybrids and fuel cells, but being small also means you can be nimble and respond to the market more quickly.
Just for reference, the most profitable car company in the world is Porsche, and they are tiny.
Tier 1 suppliers like Johnson Controls can handle a lot of outsourcing and help absorb some costs, but Subaru will have to be very smart about how they do business.
GM has done nothing for them, zero. 9-2x sales are insignificant. Saab probably won't even get the 9-6x.
So basically Subaru continues to sail along solo. They will trade Toyota hybrid technology for some batteries that FHI can supply, and after that we'll see.
Problems I see?
* they need a cheaper version of stability control, and yesterday * they can be nimble, but they really haven't, so it's time to start * fix the marketing * stop withholding the best technology (JDM market only)
That makes more sense... they should just turn out the lights and close the doors at Isuzu.... The only thing they even sell is the rebadged GMC Envoy. Just put them out of their misery already....
To me, it would make more sense for Isuzu just to pull out of the retail market and concentrate on commercial trucks.... they couldn't be selling enough Ascenders (rebadged Envoys) to make it worthwhile.
Comments
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Look, I'm no expert in this area. All I know is what I read. The cars seem to be selling well, yet there's red ink. I don't know anything about the their aero industry, other than that where FHI began their business. That one news release mentioned something about problems in that area. Couple that with a huge investment in new product, and somewhat unstable currency and other worldwide issues, and the sum total equals red ink.
I'm not worried. FHI knows the next few years will be rough. They seem to be laying down the foundation for the next 20 years or so, and sometimes that means you will encounter some rough water.
I'm more concerned with GM's situation, and how that could impact FHI. After all GM owns 20% of FHI, and a lot of FHI's engineering and purchasing is now under GM influence. GM could be forced into making some hard decisions, and that may impact FHI. We just don't know...
Bob
SoA has to find a way to turn this into a profitable year!
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Do they? I dont think the 9-2x is supposed to be a long term vehicle. GM supposedly evaluated the Tribeca as the foundation for a 9-5x, and rejected it. It appears that the 9-5x will be a Saab version of the Equinox\Torrent\Vue. GM's plan seems to be to permanently ruin Saab with rebadged Chevys, not Subarus.
I think Subaru has a great product for the northern states who face adverse road conditions much of the year. Outside of this area Subaru does not really have a perfect product yet as fuel economy is hurt by all wheel drive. Presently this puts the company in a niche. Subaru is also small compared to Honda, T, and N, though I don't know the specific numbers. This makes the production of new platforms or even complete facelifts every few years a gamble in the marketplace. This I believe is why we are hearing the new legacy and outback are 'evolutionary.' In fact they ARE revolutionary, but that goes off topic.
So the heated question is, is FHI in trouble. Or is Subaru America, in trouble, or not. My perception is that Subaru is a strong suit for FHI, and it will eventually profit its owners, though one can never be positive. Just looking at the charismatic designs and ownership experience, it would be hard to imagine someone not creating a success story with this division of FHI. FHI as a whole I am not edumacated about, but selling to GM is not a bright spot in their recent history, nor is the rebadged SAAB. So, I have no comment on the parent company.
Frog
Bob
though if this does wind up being a second year of losses at SIA, Subaru should work darn hard to ensure there isn't a third.
BTW, I would agree that the new Legacy is as much evolutionary as revolutionary - the base engine hasn't been changed at all, has it? Nor has the flat-6, to my knowledge. The revolution came in subbing in some additional aluminum to reduce weight and adding the turbo to the line, and even this was just an existing engine (detuned for use previously in the Forester) in a new application. The looks are VERY evolutionary to this jaded eye, especially those of the Outback - they made it a little more squinty-looking and added some straking to the hood and a little more pertness to the butt.
IMO, that was smart on their part - they could not afford a BMW-like alienation of existing customers at this juncture.
And as far as I can tell, FHI is in financial trouble a lot of the time - that is why it was forced into the position of selling GM 20% of Subaru, for instance. But SoA has been profitable for most years since the "dark days" around 1990. The only way FHI's troubles could impact Subaru in America is if it were forced to sell more of Subaru to GM (nooooo, noooooo, as Mr. Bill used to say!) :-(
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
http://www.subaru-global.com/lineup/legacy/sedan/model/30RB.html
For '06 I just learned we will be getting a 2.5 Spec B, with turbo, but minus the 6-speed. At first glance that may seem like a mistake, but if you've ever driven a new Legacy turbo, a 6-speed is really not needed. I'm sure the H-6 would benefit from the 6-speed, as the powerband is narrower that of the 2.5 turbo.
Bob
Now we have Subaru. They have a history as builder of niche vehicles with AWD. The market shifts from SUVs from crossovers, and everyone starts building them. Seems like that should benefit Subaru. However, instead of significantly increasing their sales, they end up with a declining share of a growing pie (see paragraph above).
In order to survive, they decide to go upscale, leaving behind parts of what was probably the most loyal owner base in the industry. As they go upscale, they encounter new competition from a slew of entry level lux vehicles with AWD. In the mean time, the Koreans have really gotten their act together improving quality and product. Features such as AWD, side curtain airbags, stability control are all available on inexpensive vehicles like the Tucson and Sportage. Subaru is getting squeezed from the bottom and from above.
Like I have said before, in the Fall of 2003, I thought that our Forester was state of the art. However, the car industry changes rapidly. Today, a 4sp auto or 5 sp manual, no stability control, and no curtain airbags is not state of the art.
I do not know what the answer is, because I still think Subaru makes a fine car. However, I think a changing corporate focus and lackluster (IMHOP) marketing is not helping them.
Tribeca had 600 pre-orders and appears to be having a good launch, better than the Legacy last year, which by the way sold in record numbers.
I think there is quite a bit of hysteria in this thread. Let's look at the facts:
* forecasts are always extremely optimistic
* 2004 was a record year for Subaru
* 2004 was the best year ever for the Legacy
* April 2005 was the best month ever
So the momentum is there and only growing.
Yes, incentives are up, but the outgoing 2004 models had even bigger incentives, plus if you look at sales prices they are about $2000 higher on average for each of those Legacy/Outback models.
So if there are misfortunes it's something noone here has looked at yet - the cost side of things. Like creating a completely new Tribeca.
-juice
And Subaru needs help?
Matrix makes sense as a light FWD hatch, but not the current AWD iteration.
Subaru should be flattered that people are comparing the Legacy GT with the BMW 3 series, it's what everyone else aims for.
Subaru has a Spec B model on the way with 18" rims and Bilstein shocks, this is exactly what they need to keep the BMW comparisons flying.
Baja - there you go. The only major failure they've had since 1995, really. Even then they invested so little I wonder how much it really cost them, besides a bruise to the ego.
-juice
Boy, you nailed that juice! Do you see the sky falling? I don't.
Bob
Mitsubishi. Will they be around to honor that warranty?
Isuzu. They have no product. Just another GMC outlet now.
I can think of plenty of GM divisions...
-juice
GM is having production problems with the Saturn Sky and it got delayed again.
-juice
That's a quote out of context. Nippon's assumptions were correct. Follow the full course of my posts and it should be easy to see that I do not believe Subaru has sold zero vehicles. The point is that Subaru does not appear to be finding many new buyers. (And by that I mean a higher volume of buyers.)
Sales of the Outback/Legacy are up 11% over last year. As mentioned above, this is largely do to Subaru having a strong April. Is the Legacy/Outback doing well because it's a good product, or is the sales boost a result of a stronger market?
Looking at the sales of similar vehicles, I'd say it's because the cross-over market is up. Murano (unadjusted) sales are up 37%. Highlander sales are up 13%. Pilot sales are up 18%. Here we have the new Outback doing moderately better than the old model at a time when cross-over sales are up almost universally across the board. It's a new vehicle! It should be clobbering last year's numbers. (By "clobbering", I mean selling faster than the norm for the class of vehicles.)
BTW, I did find one mistake in my earlier post. Forester YTD sales are up 785 units (4%), not 400 as I listed above. For a refreshed vehicle, that's not bad. It's just a low number volume-wise.
In a market where the focus is shifting from body-on-frame SUVs to cross-overs, selling these vehicles is like shooting fish in a barrel. Instead of extending their lead, Subaru is treading water. And apparently not doing it well enough to be profitable.
I find the news interesting because, unlike GM, Subaru appeared to be pretty solid. When you examine GM, you can easily point to the UAW contracts, mismanaged brands, failed vehicles, etc. You could do the same with Mitsubishi. It's been fairly obvious that these companies are failing and the reasons why are no mystery. That's even true with Honda. They've had a stagnation of their market share in passenger cars. But the reasons why are fairly obvious. These are "no duh" discussions.
It's not so easy with Subaru. They don't have such obvious flaws. Had Nippon not prompted me to dig into the issue, I'd have thought that SOA was doing better than anyone could have hoped. The resurgence of AWD has not played into their hands. The WRX and other turbo-powered cars have brought the Subaru name to the foreground. But that name recognition has not translated into increased sales. Pardon the pun, but there's been little boost from those turbos.
I don't have a clear answer for this stagnation and lack of profits. That's what makes this thread interesting to me. There may be something new to learn from this.
Just for the record, I must earnestly disagree here, having OWNED both. But I meant it when I said I did not want it to become the Outback v Matrix thread. I was merely offering one reflection on the cost of Subaru vehicles currently when compared to the rapidly proliferating AWD choices out there that varmint mentioned.
In a 30-mile radius around my house, we have lost two of the five Subaru dealers in the last year, and this is Northern California, for goodness' sake. My area used to be a Subaru stronghold, but there are less of them around these days.
"So if there are misfortunes it's something noone here has looked at yet - the cost side of things. Like creating a completely new Tribeca."
OK, then, so "costs" is your answer to the question of Subaru's red ink the last two years? Well, costs don't occur in a vacuum do they? Even Subaru officials in North America admit it is likely they will not make sales targets this year even with the introduction of the Tribeca, based on a sales volume of what, 48K per year for that model? Which will mean there is red ink on next April's fiscal report too. "Costs" will have exceeded sales profits from the new Tribeca and the rest of the line.
I really think they should have done something like a Tribeca about four or five years ago, not long after they did the Forester, when it was clear that crossovers were going to have a good future, and Subaru was riding high on a wave of fat profits. Instead, they did the Baja??????
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
As are all of Subaru's numbers, really. Forester is up 4% in the last year before the face-lift. How awful. :P
They're not going to grow into a volume seller overnight. Gradual growth has been going on since 1995, with one single year being the exception. 2005 is on pace to be the 10th year (of the last 11) with sales growth.
Is that stagnant? IMO, no. Sales have increased steadily and are now up more than 100% over the past decade.
If that is bad news, I can't wait to hear the GOOD news! LOL
As the corporation grows, they have to learn to control costs, sure. Sales are up, that's not the problem. It's a lack of profit, probably due to variable costs associated with launching a new crossover.
-juice
Think about it - they sold a record number, yet they didn't meet forecasts! :confuse:
Tribeca will do far better than the Baja, which ain't saying much, but I'll go as far as saying it's one vehicle that will exceed forecasts.
Should they have done it sooner? If they had, we'd have gotten the Saab 9-7x as yet another TrailBlazer clone. It takes more time and costs more money to develop a new vehicle from scratch (minus the engine).
Keep something in mind - Subaru did not have a large car platform at all. Now they do, so except a full-size sedan soon, or at least a big mid-size. Legacy is a smallish mid-size, about the size of the TSX. Subaru could do something TL sized now.
A lot of those are one-time variable costs. They had zero experience there.
-juice
Not sure I understand you here:
"Should they have done it sooner? If they had, we'd have gotten the Saab 9-7x as yet another TrailBlazer clone"
I thought we ARE getting a 9-7x Trailblazer clone? In fact, it is just becoming available at Saab dealers, isn't it? What has this to do with Subaru?
When I say they should have done Tribeca five years ago, I mean a less ambitious version - they should have done to the Legacy exactly what they did to the Impreza to produce the Forester. It would have been very cheap for them to do initially, and then we would be here five years later, talking about how it is the perfect time for Subaru to engineer an extended wheelbase version to accomodate 7 passengers.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Problem is, below the Impreza, Subaru has relied on Suzuki to sell clones in Europe (Justy = Swift). In Japan they only make micro/mini cars (R1, R2) that aren't really suitable for US roads, unless they got special tax breaks.
I meant a Subaru version of that GM truck, by the way. Sorry I wasn't more clear. Subaru fought to stay indy and won the chance to develop their own platform with zero input from GM. Thank God.
We might see a coupe or hatch version of the next Impreza, which is sedan/wagon only right now.
They're supposed to add a full-size sedan and a people mover.
The people mover would be (I'm guessing) like the Mazda5, a small vanlet based on the Impreza. If they did that, Forester could get taller and become more brute and less cute.
The full-size sedan, all things being relative, would actually probably be a big mid-sizer, and probably a near-luxurious one at that. We're not talking Phaeton here, more likely prices overlapping with the Tribeca, $32-38k.
A "Grand Forester" was my idea all along. I had been asking for that since the Forester came out.
Tribeca is different, more luxurious and expensive.
Now they'll more likely just let the Forester grow slightly.
-juice
You're right. I probably should have prefaced my comments with, "Forester YTD sales are up 785 units (4%)... For a refreshed vehicle, that's not bad."
Oh, wait! I did!
And I probably should have written something like, "The news is not that bad. Sales are not bad, they are stagnant."
Oh wait! I did!
A steady increase of 100% over the last decade is stagnant?
Stagnant:
Main Entry: stag·nant
Pronunciation: 'stag-n&nt
Function: adjective
1 a : not flowing in a current or stream b : STALE
2 : not advancing or developing
I don't agree at all, sorry. Then again we rarely do. :P
I'll say it again, sales/income are not the problem, you have to look at the cost side of the equation.
-juice
The Mazda5 will be a good canary in the coal mine as to whether Euro-style MPVs will sell in America. But this would not be a direction I would encourage Subaru to go in at this point. Let someone else be the guinea pig - I don't think this will be a hot segment.
I don't know about anyone else, but it is plain to me that Subaru needs a bigger car than Legacy, and now that Tribeca is arriving, they should do it quickly, to amortize Tribeca development costs sooner. They should have a wagon version of that one too - Grand Outback!
Compact coupes are another iffy segment, and no-one bought the RS 2-door Subaru used to sell here. Mainly, it would have been nice to see them hurry the Impreza makeover - it is such a slow seller, it needs more frequent revisions.
I agree it is important for them to get Tribeca, but not if it breaks the bank. Especially for projected sales of only 40K.
It is too bad that rally racing hasn't become more prominent in the United States - that would really have given Sube a boost. It could have marketed itself as the company with a little rally in every car.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Yes, it needs a larger engine, but the sportshift makes up for that, to a large degree. I'm convinced this vehicle will sell well, especially now that I've driven one. To be honest, I think there's a good chance the entry-level Tribeca could steal sales from H-6 Outbacks.
Also, juice and I were just invited (a few hours ago) to an all-day SOA-sponsored Ride-and-Drive next Tuesday. I'm sure we will have much more to say about it afterwards.
Bob
Sorry, I just don't buy the argument that Subaru is failing or "stagnant" in the marketplace.
As to rally racing, and it's influence: that's precisely why the WRX is doing as well as it—because of rally racing!
Bob
Lately, Subaru has forecasted significant growth. But they've failed to meet those forecasts. SOA's growth rate is no better than the market's growth rate. Seriously, how long has Subaru been at 1.1 or 1.2 percent marketshare? I've easily found links going back to 2001 showing a 1.1% share.
That's like putting your money under a pillow and expecting to rich on inflation.
Stagnation is when you don't budge relative to the market. Success is when you earn ground against that benchmark.
No one is expecting them to match sales volume. With all the hype in recent years, we were expecting some growth. I don't think that is an unreasonable expectation. It hasn't happened.
Bob
I read today at Automotive News that Subaru will contract to build 15,000 Saab 9-6s (rebadged Tribecas) annually at SIA beginning next year. That must be good for its bottom line. In a weird twist of fate, GM's lack of product may create a path out of the red for SoA!.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
With that in mind, SOA has to make do with what they are given to sell. Sometimes they get what they want, other times they don't. One thing that I've gotten from several people at SOA is that FHI is very conservative, and often very slow to react. This has caused some frustration at SOA, but it's just something they've learned to live with.
Okay, having said that, here's how I see the US models:
Baja: A failure by all normal business standards. Was it a bad idea? I don't think so. Was it the wrong product? Absolutely. Could Subaru have done better. I think so. Why/how did it turn out this way? I have no idea. I don't know who called the shots here. My gut feeling is they tried to do this model on a shoestring budget—and it shows...
Impreza: Unfortunately the current generation Impreza debuted with an ugly front end. That wasn't SOA's fault. That was Japan's call, and they blew it. Fortunately the WRX saved Subies tail here in the USA—because it's a great car, in spite of its looks. The car went through a mid-life facelift here for MY 2004. They're getting another one for MY 2006, and will last for two years. Normally Subaru uses a 5-year product cycle, but the Impreza will have a 6-year cycle this time around—with two costly mid-life facelifts. The all-new next Impreza will debut here as a 2008 model, and reportedly will be very Euro-looking. There have been recent rumors of it going to a hatchback body.
Forester: This has been a good product for Subaru. It's always sold well, and is also getting a facelift for MY '06, with an all-new model also due for MY '08.
Legacy: The new Legacy turbo has been a huge success for SOA. Sales for the Legacy lineup are way up over the previous model.
Outback: From everything I've read, again a success.
Tribeca: Most people once they see it in person, like it. I just drove one today, and it's pretty impressive.
All future Subarus will wear a version of the new Subaru face found on the Tribeca; love it or leave it, but that's face of Subaru's future. I like it. I know Varmint hates it. Only time will tell who's right here, but I'm willing to bet that FHI made the right decision here.
Bob
Having said that, I would agree that what happens in other markets will impact what happens here in the US.
So, what's Subaru's global market share? This is their projection.
It is a mistake for Subaru to let the existing Impreza run for two more years with nothing more than an 8 hp bump and yet another new face. Not a big mistake, because Impreza is not a big seller, but a mistake nonetheless.
Will it hurt Tribeca sales that there will be a Saab version available? I think so. Not only is Subaru marketing it as a "luxury model" (with questionable rights to such a description) but we all know that you can now buy the Saabaru WRX cheaper than the original article. With GM's practiced use of enormous cash incentives, can we say with any certainty that the Saabaru Tribeca will not be cheaper than the Sube a year from now? I think we cannot. Since this is a vehicle that will cost $28-35K to get into in the first place - already dangerous territory for Subaru - I don't think it can afford the competition.
I really wish Subaru would remember its roots enough to turn out some more basic cars IN ADDITION TO the upmarket vehicles it seems to be concentrating on right now. They could bolster sales in North America a lot if they did so.
2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)
Everyone that I know that owns a Subaru *loves* the car. (Including myself with my new Forester). Everyone I have driven in the car is impressed with it. In fact I think my inlaws are going to buy one.
Second,
Subaru has excellent performance in it Turbo cars.
So what are my percevied problems? Getting people to look at the Subie before buying there Camcordy. Or there CR-AV4. And, when Warren Brown of the Washington Post looked at the Kia Sportage he raved about it, including the V6 -- which has a few more horsepower than the naturally aperated 4 and gets worse gass mileage than the 2.5Turbo.
Subaru makes a good car; they seem to be reliable and durable. Sure, they are more expensive than the Hondas or Camry equivelants, but they offer AWD. And all of the safety features standard.
What Subaru needs is better marketing.
YES! Subaru needs to invest some cash here. This could have a huge impact on how it is recieved over the next decade. And Subaru needs a good strategy.
I will agree that Subaru could use a low end item. The Nissan Sentra is going for 1099 around here. A decent little car. Subi starts around twice that, putting it out of shot of many people's first new car buy.
I really like the R2 car sold I believe in Japan. I think these scooter based mini cars will be the wave of the future around urban areas due to light weight and low cost and emissions. I would like to see a Subaru produce a hatch about the size and weight of the current golf, or a little smaller.
I think SOA's weak muscle in Fuji combined with the companies small size makes it impossible to reconfigure the plants for new models or a larger line-up. The company has to make a few good selling lines and stick to a formula. This creates slow growth, but makes fluctuation minimal.
Frog
http://www.theautochannel.com/news/2005/05/23/103258.html
If this thread is about US Subaru (SOA), the title of it, "Subaru's fortunes - can they turn it around," doesn't in any way suggest that. To me it suggests Subaru globally, and not just the United States, but I guess that's besides the point. I do think the thread title is at worst, alarmist; and at best, misleading. It suggests that Subaru is about to become the next Isuzu or Mitsubishi, which is clearly not the case.
Bob
They'll never be Toyota, or even Nissan for that matter.
The car maker with the most success in terms of sales growth is Hyundai recently, but Subaru isn't willing to try and compete at those prices. They don't have cheap Korean labor behind them.
They do need better marketing, to be honest since Dundee they have not had a single effective marketing campaign. Instead they've had controvery, from the Radar Love WRX ads to the Forester bunny commercial that got PETA all over them. And even I'll admit "Think. Feel. Drive." is kinda dumb.
By the way, I agree about the Mazda5 having a limited audience, a conventional minivan (well, with AWD) would have more sales potential.
Swampy: no helmet pics!
-juice
From what I understand, they just didn't meet an internal estimate for a sales increase . It's not like their sales have dropped off a cliff and they are ready to declare bankruptcy.
Although, I still say, I think the new corporate face is a big mistake...just IMO, I think it's ugly as sin.
SIA used to mean Subaru-Isuzu Automotive. Isuzu bailed out, and for a while there Subaru was building Isuzu vehicles under license. It was no longer a joint venture, but wholly owned by FHI.
Now they've stopped production of Isuzu vehicles, and Subaru's optimistic forecasts were supposed to fill that void.
There's your problem, right there. The added costs of operating an entire plant without Isuzu to spread the costs with. Rather than dividing the costs, Subaru is now footing the bill all alone.
I believe the Tribeca assembly line actually takes the place of the old Rodeo line. So only now will they start to make earnings to replace the lost income from the stoppage of the Isuzu line.
There you go.
-juice
So they might be completely wrong about this.
It wouldn't be the first time.
-juice
People still talk about the big three, overlooking the fact that Chrysler is a subsidiary of a foreign multinational. Ford and GM are sucking wind and will likely end up restructuring and dumping some pension obligations, if not actually going into bankruptcy. Toyota and Honda are extremely tough competitors, and the Chinese are coming. As a small player, Subaru is at risk. I hope they survive, but right now I do not agree with the upmarket strategy, and I think their marketing has been unfocused.
You'll probably need to collaborate to do things like hybrids and fuel cells, but being small also means you can be nimble and respond to the market more quickly.
Just for reference, the most profitable car company in the world is Porsche, and they are tiny.
Tier 1 suppliers like Johnson Controls can handle a lot of outsourcing and help absorb some costs, but Subaru will have to be very smart about how they do business.
GM has done nothing for them, zero. 9-2x sales are insignificant. Saab probably won't even get the 9-6x.
So basically Subaru continues to sail along solo. They will trade Toyota hybrid technology for some batteries that FHI can supply, and after that we'll see.
Problems I see?
* they need a cheaper version of stability control, and yesterday
* they can be nimble, but they really haven't, so it's time to start
* fix the marketing
* stop withholding the best technology (JDM market only)
-juice
-juice
Basically Isuzu has become an outlet to sell more GMCs.
Subaru has to pick up the slack that the Rodeo and Axiom left behind when they stopped being produced at SIA.
-juice