What Does Subaru Know That Others Don't?

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  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I gave up 8 mpg switching from a Scion xA to a Subaru, but I don't get blown sideways on rainy highways anymore. :P
  • rshollandrsholland Member Posts: 19,788
    Oh certainly, I just have to speak up when people get to saying there is no fuel economy penalty for AWD.

    I hope you're not are referring to me here—because that's not what said.

    Bob
  • morin2morin2 Member Posts: 399
    Because Subaru doesn't offer a FWD, we can't directly compare the mpg penalty with the advantages of AWD. Its not fair, IMO, or valid, to compare an AWD Subaru to a Matrix for fuel economy - IF you have not even considered the value of AWD in your decision-making formula.

    We can compare others that offer both FWD and AWD:
    Mazda Tribute (or Escape): 2009 isport fwd 2.5 w/6speed AT: 20/28/23 at MSRP 21790 (from Edmunds) VS:

    same model with AWD: 19/25/21 at MSRP 23545.

    So comparing apples with apples for Tribute/Escapes, the mpg tradeoff is about 1 to 3mpg at a cost of about $1750.

    That knowledege should be used to evaluate the relative importance of the AWD utility VS the fuel economy edge of the FWD. Because Subaru does not offer a FWD model, we can't do this within the Subaru line. I prefer Subaru, but other makes offer the option of choices - and my preference of choice is affected by the reality of my 107 mile daily roundtrip commute. These are personal choices made in analytical ways. For example, I'm about to lose my commuter (02 Prizm) to my teenage daughter (the consequence of my offering it in exchange for 3 years of all A's - a good deal for all) and my wife has offered to allow me to drive her 07 Forester while she takes my 01 Silverado for her 26 mile commute, for total fuel economy purposes. Of course, the very least fuel would be consumed by having the new driver take my boat-tower v-8 4x4 pickup to high school - but I think these are not good vehicles for new drivers. And please keep the school bus comments to yourselves - its not an option with daily after-school sports practices. If Subaru offered a basic FWD Legacy, I would probably choose it before a Camry or Accord for my daily driver.

    My previous posts pointed out that buying decisions are based on perceptions about poor fuel economy - and those perceptions may not be fairly evaluated & considered by the evidence. In actual practice, I squeeze more MPG out of an AWD Forester with my gentle driving than most people do who blast past me in a FWD and then stand on their brakes at the next red light.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I think Subaru has carefully nurtured its brand identity--this is not easy to do in a world of "cookie-cutter" cars. Part of this is the AWD platform, part of it is that you don't see Subarus in rental fleets very often, part of it is that the styling is bizarre enough to be different in the pack.
  • morin2morin2 Member Posts: 399
    I think Subaru has carefully nurtured its brand identity--this is not easy to do in a world of "cookie-cutter" cars. Part of this is the AWD platform, part of it is that you don't see Subarus in rental fleets very often, part of it is that the styling is bizarre enough to be different in the pack.

    You're right about the brand identity Shifty. Where we may disagree is with the value of a company "staying the course" or making changes with the times. Does Subaru lose more sales by being an all AWD marque than they gain by being all AWD? That question probably can't be answered without testing the waters with a FWD option. Perhaps I'd take more risks than an auto CEO - I'd certainly have the boxer diesel here by now.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Well what would Subaru be with a FWD lineup? It would be a "second-tier" Japanese manufacturer---like say Mitsubishi. How does Subaru do in sales vis a vis Mitsubishi?
  • morin2morin2 Member Posts: 399
    Toyota & Honda enthusiasts would argue that Subaru is already a second-tier (whatever that means) manufacturer. I love Subaru but I'm not blinded by it. I'm not advocating a FWD lineup either - that would be silly. But one well-placed FWD model to test the waters and directly challenge a competitor - like a FWD Impreza for the Civic shoppers or a FWD Legacy to target the Camry & Accord shoppers (who for 2 decades only shop Accord vs Camry).

    Do you market for the masses or for the niche?
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Well any given product can produce only so much market penetration. No matter how good you are, you can't own the WHOLE niche anyway.

    Is an iPhone better than Phone X and Phone Y? Probably. But do people buy lots of Phone X and Phone Y? Yeah, they do, because there is some advantage to them to do so.
  • steverstever Guest Posts: 52,454
    Surely someone, some where, has stuck the FWD fuse in their Subaru and checked the mileage?

    Take that number and perhaps pad it a little bit for the extra weight of the AWD system.
  • ateixeiraateixeira Member Posts: 72,587
    Well what would Subaru be with a FWD lineup? It would be a "second-tier" Japanese manufacturer---like say Mitsubishi. How does Subaru do in sales vis a vis Mitsubishi?

    Subaru is killing, absolutely annihalating, Mitsubishi in sales.

    Mitsu is losing even to poor old Suzuki.

    FWD offerings have not done squat for them.

    Plus, if you look at the models that do offer AWD, Subaru still kills them. Forester outsells the Outlander, and Impreza outsells the Lancer, and by wide margins.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Well there you go. And Mitsubishi cars are pretty good products I think, probably just as good as Subarus. But the image isn't there and the product lineup not as distinct.

    Were it not for the EVO, Mitsubishi would be as obscure as Suzuki or Isuzu.
  • ateixeiraateixeira Member Posts: 72,587
    I think they simply became the Japanese Chrysler.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Well yes their one-time association with Chrysler did them no good whatsoever. That was a bad move.
  • lemkolemko Member Posts: 15,261
    I think it did them a world of good. Nobody would've even known what a Mitsubishi car was without it's connection with Chrysler. Mistsubishi cars first arrived on these shores in 1970 as a "captive import" known as the Dodge Colt.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    Except that those Mitsubishi/Chrysler joint efforts were lousy cars and actually hurt Mitsubishi's reputation for reliability.

    Now I think Mitsubishi makes a better car than Chrysler.
  • nippononlynippononly Member Posts: 12,555
    Subaru up for the second month

    February's consumer confidence level fell to another historic low as continuing claims for unemployment benefits hit record highs and credit markets remained frozen.

    In addition to the biggest automakers, Volkswagen said its VW brand fell 17.5 percent. Daimler AG slid 20.6 percent, and Hyundai was down 1.5 percent.

    Subaru, the only automaker to increase U.S. sales last year, rose for the second straight month in 2009

    http://www.autoweek.com/article/20090303/CARNEWS/903039968

    And of course, the backdrop for this is all of the Japanese Big 3 being down close to 40% for the month, and GM and Ford being down close to 50% or more. This was the slowest February for sales EVER, going all the way back to 1976 when they started keeping records in this way.

    On a sidenote, VW and Hyundai seem to know some secret too, as they have been weathering the recession much more successfully than other manufacturers as well.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • ateixeiraateixeira Member Posts: 72,587
    Right now the daily sales rate for the Forester would put it at 78,000 sales per year, and that's in this depression.

    Once things pick up I bet it breaks 100k, and consistently.

    The segment does a lot of volume and will only keep growing. Ford, Honda, and Jeep have all had models that do that type of volume for years on end. Now Subaru will, too.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I can see Hyundai's appeal right now---value for the $$$. I'm not sure why VW is making money. It's not reliabililty that's for sure. Maybe distinct good looks and very nice driving experience? Not sure. Subaru just has the right cars in the right niche and the right time, and a good reputation to boot.
  • nippononlynippononly Member Posts: 12,555
    Well VW probably has more cheap leases available for more of the year than any other manufacturer out there. Still even now I can get three different base model VWs for $199/month, even now - just saw the ad last night about four times on TV.

    OTOH, it is gratifying to see that Subaru has not had to up its incentive game in order to achieve this awesome sales rate it has going. They continue to offer some leases for base models, but no cash for all but the oldest models, and even then not a ton of cash.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • ateixeiraateixeira Member Posts: 72,587
    I don't think the Forester has any cash at all. Even the finance rates are not at 0%, though they are subsidized slightly.
  • nippononlynippononly Member Posts: 12,555
    and even though Subaru had its sharpest down spike of the last year, it is still the #1-performing automaker (YTD) for sales:

    Subaru, down 6.7% for the month, deown 0.8% for the YTD.

    Overall market, down 34.3% for the month, down 37.4% for the YTD.

    They had better keep their eyes open though, Hyundai is sneaking up on them, down just 3.7% for the YTD, and far ahead of the rest of the automakers.

    http://www.autonews.com/apps/pbcs.dll/article?AID=/20090501/ANA05/905019986/1078-
    (registration link)

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • ateixeiraateixeira Member Posts: 72,587
    Hyundai may not profit, though, given they are paying for cars for people who lost their jobs.
  • backybacky Member Posts: 18,949
    More accurately, they are paying an insurance company some kind of premium, and the insurance company will pay out when people return their cars under the terms of the Hyundai Assurance program. Do you have any info on how much that premium is and what effect it has on Hyundai's profit picture?
  • nippononlynippononly Member Posts: 12,555
    I noticed this at the bottom of an article on Fuji's stakeholder, Toyota:

    Japan's Fuji Heavy Industries Ltd., in which Toyota has a 16.5 percent stake, forecast its annual operating loss could balloon to 35 billion yen this year from 5.8 billion yen in 2008-2009, citing weak global car sales.

    I guess the U.S. is a less important market for Subaru than for other Japanese automakers, as it seems to be doing relatively well in the U.S.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • ateixeiraateixeira Member Posts: 72,587
    I don't... and I doubt Hyundai will want to disclose that. They will spin the good news (higher market share).
  • ateixeiraateixeira Member Posts: 72,587
    FHI sells a lot more than just cars, so they can't escape the global crisis even if the auto division does well.
  • nippononlynippononly Member Posts: 12,555
    even if the auto division does well.

    But it isn't. The news piece says explicitly "citing weak global car sales".

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • backybacky Member Posts: 18,949
    Of course. Just like Subaru likes to emphasize their relatively strong sales, vs. the cost to their profits of their subsidized lease program that allows them to offer leases on $20k cars for around $200/month with zero down.
  • ateixeiraateixeira Member Posts: 72,587
    Well, the US is their 2nd biggest market traditionally. I haven't seen the numbers but they may be lousy in Japan, their #1 market.
  • ateixeiraateixeira Member Posts: 72,587
    Where'd that come from? :confuse:

    One reason leases are good is that residuals are higher than competitors. ALG and Edmunds confirm that.
  • backybacky Member Posts: 18,949
    Where did what come from? :confuse: Do you disagree that Subaru tends to talk more about the sales impact of their subsidized lease program (not to mention their low-interest financing and cash-back programs), vs. the cost to the business of those programs?
  • ateixeiraateixeira Member Posts: 72,587
    It's a pretty standard industry practice to subsidize leasing. Look at BMW, Volvo. Heck, look at what it costs to lease some Saabs. They basically give them away.

    It may erode profits but I'm sure it's less painful than offering deep discounts.
  • backybacky Member Posts: 18,949
    Some automakers subsidize leases; some offer cash back; some offer low APRs. And some are a little more imaginative with incentives. What's the difference? They all affect the bottom line to some degree, do they not? Why single out one company because it offers a type of incentive that Subaru does not?
  • ateixeiraateixeira Member Posts: 72,587
    I guess some strategies are more hidden from the consumer and don't have as much of an adverse effect on residual values.

    Subarus hold their value well, so I'm not bothered by the $199 leases.

    I wonder how many actually go out the door for so little, though. With bait-and-switch I'm sure they upsell most buyers to something nicer.
  • backybacky Member Posts: 18,949
    Like the Legacy SE at around $229/month? ;)
  • ateixeiraateixeira Member Posts: 72,587
    I'm sure they'll up-sell you into a GT Limited for just $309/month but today only so hurry. :D
  • nippononlynippononly Member Posts: 12,555
    May sales results? It is now official: Subaru, down 1.8 for the YTD, is the best-performing automaker in the U.S. Even Daimler, which was previously in positive territory, is now well behind Subaru, and the nearest competition is staying a steady 6 points back - that would be Hyundai, BTW, down 7.4%.

    The industry average, by the by, is down 36.5% for the YTD, and in case you missed it Toyota, Subaru's part owner, is now down MORE than the industry average, which means it is losing market share for the first time since the recession started.

    http://www.autonews.com/apps/pbcs.dll/article?AID=/20090602/ANA05/906029980/1078- - -
    (registration link)

    Edit...PS I was one of those 17,505 Subaru sales in May. :-)

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    In terms of cost per mile, my used Outback is now the leader among all the cars I ever owned, having dethroned the previous money-miser in cost-per-mile operation, my Mercedes diesel. My worst cost per mile was Saab, which was a disappointment, followed by my Porsches, which was no surprise (AND WORTH IT!!! :P )
  • ateixeiraateixeira Member Posts: 72,587
    If you hadn't bought the car Daimler may have won that month. ;)

    Forester sales were down a tick, but that's because we are now comparing 2009s to 2009s, i.e. the new model.
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I'd like to test drive a new Forester.
  • ateixeiraateixeira Member Posts: 72,587
    Did you see that crazy off road video? Anyone have that link handy?

    If my wife saw that I don't think she'd EVER give the me the keys! :D
  • nippononlynippononly Member Posts: 12,555
    Subaru was the ONLY automaker up in month-over-month sales in June: 3.4%! The new Impreza and Forester were well established by June last year, so we can no longer say it is a fluke of timing of the new Forester's debut.

    And for the year, it is only down 0.8%, still by far the leader in a market that is down 35% overall. And still leading its nearest rivals, Hyundai (down "only" 9% for the year) and VW (down 16%).

    Rock on Sube! :-)

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • nippononlynippononly Member Posts: 12,555
    Next week, Subaru's Impreza WRX gets a co-starring role on Syfy's "Eureka," which returns for its fourth season July 10. The vehicle will be featured in several episodes as the high-tech replacement for Tabitha, an old jalopy of one of the main characters. Subaru will also have a custom microsite at syfy.com/Subaru.

    .....And later this year, the Impreza WRX STI will be integrated into AMC's all-star remake of 1960s spy drama "The Prisoner," featuring Ian McKellen and Jim Caviezel.

    .....Shari Weisenberg, Syfy's VP-strategic marketing, said the network was looking for a car that had a built-in consumer following, with a brand and agency team willing to find ways to make the product work within the scripted show's storyline.
    http://www.autonews.com/article/20090706/ANA02/907069984/1018
    (registration link)

    It's nice to know that WRX has a built-in consumer following. That's always good for sales! :-)

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • morainemoraine Member Posts: 4
    I presently own a 2006 FWD Saturn Vue (33,000 miles) with the Honda V-6 engine and transmission in it. I also own an old beat 98 Dakota pickup which qualifies for the "Cash for Clunkers" program. I do not want a new pickup, but am concerned that my Saturn will rapidly depreciate from its' present value with GM dumping them and parts will become an issue. My question is do people think that my concerns are probably going to become a reality and if so should I look at bundling my Dakota (worth $4500 with the "CARS" program) with my Vue then go for another small people-cargo carrier. I've looked at the new 2010 Subaru Outback and liked what I saw, but still want to maximize my best bang for the buck coupled with reliable and affordable transportation. I most likely will in the end replace my truck with a quality small used pickup, but if I do that only, I will get next to nothing for the Dakota and loose out on the Cash for Clunkers. If holding onto the Vue is going to lead to a very rapid devaluation from where it books out at now coupled with parts issues in the future coupled with passing on the Cash for Clunkers opportunity are my two concerns. All thoughts, information and suggestions on are this is appreciated.
  • ateixeiraateixeira Member Posts: 72,587
    To be honest the soon-to-be orphan cars probably already lost value, so you may be too late to avoid that.

    I'd trade only the Dakota and get that big incentive.
  • nippononlynippononly Member Posts: 12,555
    2010 Outbacks be available to test drive?

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • anythngbutgmanythngbutgm Member Posts: 4,277
    My dealer has had demos for test drive for a couple of weeks now. Haven't gotten the chance to yet myself.
  • nippononlynippononly Member Posts: 12,555
    Subaru was up more than 50% last month! Yes, everyone got a boost from C4C, but no-one anywhere near as much as Soob, except for Hyundai, which is going to wind up overtaking the domestics and Honda one of these fine years.

    Ford, Subaru and Hyundai lead first U.S. sales gain in 21 months

    Subaru's sales spiked 51.5 percent for the brand's best month ever, spokeswoman Heather Ward confirmed. It also was Subaru's largest increase since at least 1998, according to Automotive News data. Subaru's eight-month sales were 11.2 percent above last year's levels, and it is the only automaker ahead of its 2008 pace.

    http://www.autonews.com/article/20090901/ANA05/909019992/1254

    (And yes, Ford did OK too, but nowhere near as well as Subaru)

    28K sales in a single month! I figure that as a proportion of the total vehicles sold, Subaru had one of the highest percentages of vehicles that made at least the 22 mpg target figure to qualify for C4C, out of all automakers.

    2014 Mini Cooper (stick shift of course), 2016 Camry hybrid, 2009 Outback Sport 5-spd (keeping the stick alive)

  • ateixeiraateixeira Member Posts: 72,587
    These new buyers now know what we've known all along. :shades:
  • Mr_ShiftrightMr_Shiftright Member Posts: 64,481
    I love my Subaru. It is reliable, tough, good on gas (for a Subaru I mean) and it remembers my birthday.
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